As people step firmly into adulthood, they often find both their careers and family life blossoming. This usually means higher income, which in turn leads to more assets – a new house, for example. Along with that often comes the added considerations of caring for children, both now and long into the future.

These positive life shifts are a perfect time to take stock of your situation and establish an estate plan, one that will protect what you’ve earned and set your family up for anything that comes. The first step is understanding the difference between two fundamental estate planning tools: wills and trusts.

What is a will?

A will is maybe the most straightforward form of estate planning. It’s a document where you lay out exactly what you want to happen to your estate after your death. This can include specifying who takes possession of assets such as your home, other real estate, high-value items, family heirlooms and even your money.

After someone passes, their property has to go through probate. That’s the court-supervised process of legally validating the document and dividing the assets as directed. While probate offers some clear structure, there are potential downsides to consider.

For one, it is a public process. If you’re looking to keep matters private, a will might not be the best option. It can also take quite a long time and potentially be expensive, depending on the size of your estate.

What is a trust?

Trusts, like wills, are all about clarifying your long-term wishes. They operate more like a contract, however. You put certain assets into a trust, and provide directions for how those assets will be used or distributed. You then give the responsibility of executing those directions to someone else (known as a trustee).

There are many different types of trusts, including:

  • Revocable and irrevocable trusts
  • A family trust
  • A generation-skipping trust
  • A special needs trust
  • Charitable trusts
  • Constructive trusts

While trusts are generally more complicated to set up than a will, they may allow for more flexibility in protecting specific assets and ensuring your wealth remains as intact as possible going forward.

Which option is the best?

On the surface, wills and trusts do similar things. In reality however, each comes with its own benefits and disadvantages. Which option is right for you? It depends entirely on your goals.

Some people may be comfortable relying exclusively on a will. Other individuals might want more control, and will choose to use a will for big-picture estate questions while utilizing a series of different trusts to ensure certain assets are protected from the probate process.

Determining the best course of action is something an estate planning attorney can help with.