Wills and trusts are both useful estate planning tools.

The debate over whether wills or trusts are better in estate planning has been argued by many for decades.

The nature of this argument may be likened to whether a screwdriver or wrench is a better tool.

It depends on what you need for the specific task at hand.

According to a recent The Motley Fool article titled "Is a Will Really the Best Way to Pass an Inheritance to Your Family?," experienced estate planning attorneys ask their clients about assets, family dynamics, and goals when helping guide clients through deciding what type of plan is most appropriate.

Choosing between wills and trusts is simply selecting the right tool for the job.

A last will and testament is often sufficient for smaller estates with friendly family dynamics, especially for younger couples with minor children.

The last will provides directions to name an executor for the estate, helps guide the distributions of assets, and facilitates the selection of a guardian to rear any minor children to adulthood.

Other circumstances may lend themselves to the use of a trust.

Those whose wealth exceeds the estate tax exemption threshold or who have loved ones with special needs often benefit from various irrevocable trusts, such as a spousal limited access trust, grantor retained annuity trust or charitable remainder trust.

People who only have a last will subject their estates to probate proceedings, at least regarding any assets that do not have a surviving joint owner or designated beneficiary.

What is involved in probate?

The last will must be submitted to the probate court for authentication.

Once the probate judge has established the document's validity, the executor named in the last will is granted the authority to administer the estate.

Because of the court involvement, probate can be lengthy, costly, and time-consuming.

It also is public.

Anyone can request a copy of your last will and the inventory of your assets subject to probate.

This means anyone can see who you chose as heirs and what you left to each.

This is why we know so many of the details of celebrity estates.

Yikes!

While the estates of most people will not be the subject of public curiosity, some may choose to limit what certain family members can know about the terms of their estate planning.

Trusts can be a helpful alternative to last wills for such individuals.

A revocable living trust is a legal entity capable of holding title to assets while the person who created the trust is alive.

Typically, the trustmaker serves as the primary trustee, with a secondary or successor trustee designated in the trust.

The trustee is responsible for managing the trust according to the directions outlined in the trust document.

An experienced estate planning attorney can also include provisions to move assets into your trust when you die.

Because living trusts can be revocable, changes can be made to the trust while you are alive.

You can even revoke it.

Another way to funnel assets to heirs outside of probate is through joint ownership or beneficiary designations.

By choosing either of these methods, the assets can pass directly to the surviving owner or designated beneficiary while bypassing probate.

Because people have different circumstances and needs, it is impossible to say whether last wills or trusts are better definitively.

[For my Baby Boomer cohort, it is kind of like the "Ginger or Mary Ann" conundrum.]

An experienced estate planning attorney may even recommend a combination of joint ownership, beneficiary designations, trusts, and last wills to accomplish your estate planning goals.

Reference: The Motley Fool (September 4, 2023) "Is a Will Really the Best Way to Pass an Inheritance to Your Family?"