When it comes to estate planning, one of the most common questions people ask is whether they need a will or trust. The right choice depends on your assets, your family situation, and your goals for managing your affairs during incapacity and after death. This article is designed to help you understand the key differences between a will or trust, so you can make an informed decision about which option best fits your needs in Texas.
What Is a Last Will and Testament?
A Last Will and Testament is a written set of instructions that outlines how your money and property should be distributed after you die. The person who creates the will is called the Testator (or Testatrix). The Executor is the person responsible for making sure the will is followed. They begin by hiring an attorney to file a probate application, which is a formal court process to prove the will is valid under Texas law.
Once the judge is satisfied that the will meets all requirements and has not been revoked or changed, the court will issue Letters Testamentary. These are official documents that give the Executor authority to manage and distribute your estate.
What Is a Trust?
A Trust is a legal arrangement that manages your assets both during your lifetime and after you pass away. It’s often created while you’re still living, and it includes detailed instructions on how to handle your finances if you become incapacitated or when you die. The person who creates the trust is called the Grantor or Settlor and often serves as the initial Trustee. A successor Trustee is named to step in when needed.
Whether you choose a will or trust, both options allow you to name beneficiaries who will receive your assets, but they differ significantly in how that transfer takes place.
Key Differences Between a Will or Trust
Wills and trusts are both designed to transfer assets to your beneficiaries. But they operate very differently:
- A will has no legal effect until after death and until it is validated by a Texas probate court.
- A trust is created during your lifetime and takes effect immediately, avoiding the need for probate altogether.
Choosing a will or trust often comes down to whether you want to keep your estate out of court, reduce delays, reduce costs, and maintain privacy.
Why Avoid Probate Court?
Even though Texas has a relatively streamlined probate process, it can still be slow and expensive. After filing to probate a will, notice must be posted for at least 10 days before a hearing. However, in the Dallas/Fort Worth area, hearings are often delayed 1.5 to 8 months due to court schedules.
If the person who died owned a business or rental property, these delays can be financially devastating. Without someone authorized to sign checks or handle business operations, the estate could suffer major losses. A trustee under a trust can act immediately.
Market volatility is another concern. If investments need to be moved quickly, a will-based plan offers no solution until the court acts. A trust-based plan allows the trustee to act without waiting.
Finally, probate is public. Anyone can view your probated will online. A trust keeps your affairs private.
Should I Choose a Will or Trust If I Own Property in Multiple States?
If you own property in more than one state, using a trust helps you avoid having to go through probate in each jurisdiction. A will, by contrast, would require separate proceedings in each state where you own property.
Do Wills Offer Any Benefits While I’m Alive?
No. A will has no legal effect while you are alive. A trust, on the other hand, can take care of you if you become incapacitated. Your trustee can manage your finances and ensure your needs are met—without court involvement.
What About Powers of Attorney?
Whether you choose a will or trust, you’ll need additional documents to cover situations where you’re incapacitated. These include:
- Statutory Durable Power of Attorney (for managing finances)
- Medical Power of Attorney (for health care decisions)
- HIPAA Authorization (to give others access to your medical records)
- Advance Directive (for end-of-life decisions)
- Declaration of Guardian (for you and/or your children)
A Statutory Durable Power of Attorney can sometimes fail. Banks may reject the document under one of 12 reasons allowed by the Texas Estates Code, especially if they believe the document wasn’t validly executed. This is a risk in will-based plans. A trust often avoids this issue entirely, since the trustee already has authority.
What Happens If a Power of Attorney Isn’t Accepted?
If a financial institution rejects the power of attorney, your only option may be to seek guardianship through the court. This is a public and expensive process that can be humiliating and divisive for families. Choosing a trust is one of the best ways to avoid guardianship.
What Else Can a Trust Do?
When deciding between a will or trust, consider the additional benefits a trust provides:
- Protect the Surviving Spouse – Shield assets from creditors and financial predators.
- Protect Beneficiaries – Use lifetime asset protection trusts to guard against divorce or lawsuits.
- Gift and Estate Tax Planning – Ensure both spouses use the full estate tax exemption. A properly designed trust can provide a “step up” in capital gains tax basis twice, reducing tax liability.
- Remarriage Protection – Prevent a surviving spouse from disinheriting your children in favor of a new spouse.
- Special Needs Planning – Use a supplemental needs trust to preserve government benefits for disabled beneficiaries.
- Custom Planning – Tailor the trust to your family’s exact needs in a way a generic will or trust template cannot.
Do I Really Need a Trust?
Not everyone needs a trust. If you rent your home, have less than $75,000 in assets, and want a simple distribution, a will-based plan may be sufficient. But if you want privacy, flexibility, and the ability to avoid court delays, a trust may be a better fit.
Still Not Sure Which Will or Trust Option Is Right?
Every family’s needs are different. If you’re weighing the pros and cons of a will or trust, reach out to our team for a free consultation. We’ll help you explore your options and choose a plan that protects your family and your legacy.