What are the important differences between wills and trusts?

You want to protect your family's future, but the process of evaluating wills vs. trusts feels overwhelming. Both estate planning tools serve important purposes, yet they work in different ways and offer distinct advantages depending on your situation.

At Ross & Shoalmire, P.L.L.C., our Estate Planning and Elder Law Attorneys help families in Texas and Arkansas understand their options and create plans that reflect their values and goals. Understanding the fundamental differences between these tools helps you make informed decisions about your family's future.

How Do Wills and Trusts Function Differently?

Perhaps the most defining characteristic of wills vs. trusts is when they take effect. A will functions only after you pass away. It directs how your assets should be distributed and names guardians for minor children. In many cases, the document must still go through probate court, where a judge will oversee the distribution process.

A trust, on the other hand, creates a legal entity that holds your assets during your lifetime and ensures their distribution after your passing. You might also be able to serve as a trustee while you’re still alive, maintaining control over your property. Upon your death or incapacity, a successor trustee steps in to manage the trust according to your instructions.

The timing difference between these estate planning tools affects how quickly your beneficiaries receive their inheritance and how much privacy your family maintains during the process. One is not necessarily better than the other, but they serve different needs. Arrange for a consultation with an Estate Planning Attorney at Ross & Shoalmire, P.L.L.C. to ask questions about wills and trusts so we can advise you about the specifics. 

Probate Requirements and Privacy Considerations

Wills must go through probate. This court process can take several months or longer, depending on the size of the estate and any potential disputes. Additionally, probate records in Texas and Arkansas become public: this means anyone can see what you owned and who inherited your assets. This could create unwanted attention for your family. Court records reveal asset values, debt amounts, and family disputes. This information becomes accessible to creditors, scammers, and anyone curious about your family's financial affairs.

For this reason, among others, many people with substantial assets tend to utilize a trust. Trusts typically avoid probate entirely. Assets held in trust transfer directly to beneficiaries without court involvement, often within weeks rather than months. Trust documents also remain private, protecting your family's financial information from public scrutiny.

Texas probate laws offer some simplified procedures for smaller estates, but larger estates usually require full probate administration regardless of whether you have a will. 

What Are the Cost Differences in Will vs. Trust Creation and Administration?

One benefit of creating a will is that it tends to be more streamlined and simpler than a trust. At Ross & Shoalmire, P.L.L.C., we recommend only the services that you and your family need for secure estate planning. Creating a will does typically cost less upfront than establishing a trust. However, the long-term costs tell a different story. Consider the following additional expenses: 

• In Texas, the executor of a will can be compensated up to 5% of the estate's gross fair market value. 
• Disputes among heirs can lead to extensive attorneys’ fees, filing fees, and other costs. 
• Executor bonds, notary expenses, storage fees, business valuation, and appraisal fees all increase probate expenses. 

In both Arkansas and Texas, probate costs typically scale with the value of the estate—meaning larger estates can incur substantial expenses through court filings, attorney or executor fees, and other administrative charges. In Arkansas, probate commonly runs 3%–7% of the estate’s value, while in Texas, percentage-based attorney/executor compensation and related costs can add up quickly, especially for multimillion-dollar estates. 

By contrast, trust administration in both states generally avoids court involvement and many statutory fees, resulting in lower ongoing costs—often a flat or modest percentage of the estate. Although establishing a trust requires a higher upfront investment, for clients with larger estates in either state, the streamlined process and reduced fee structure often make trusts a more economical option over the long term.

Funding a trust requires transferring assets into the trust's name. At Ross & Shoalmire, P.L.L.C., our Estate Planning Lawyers can assist you with the administrative work as well as advise you about what assets are best suited to governance under a trust. 

Trust Asset Protection and Tax Implications

Both wills and trusts offer limited asset protection during your lifetime. However, certain types of trusts extend protection from creditors and reduce estate tax liability for high-net-worth families.

Revocable

Revocable trusts provide the most flexibility for those who make them, as well as direct control over their assets. Perhaps their main drawback is that they offer no tax advantages during your lifetime, though. Since you retain control over the assets, the trust income appears on your personal tax return just as if you owned the assets directly.

Irrevocable

Irrevocable trusts can provide tax benefits and asset protection, but you must permanently give up control over the transferred assets. Because of this, irrevocable trusts might not be the best strategy in certain circumstances. These tools tend to work best for:

• Reducing estate tax liability for wealthy individuals.
• Protecting assets from long-term care costs.
• Shielding inheritance from beneficiaries' creditors.
• Providing for children with special needs.

Under Texas Property Code Title 9, irrevocable trusts can sometimes be modified despite the name, but only with the agreement of all beneficiaries or through court involvement. You can add assets at any point to a trust, but removing them is often more complicated and is best attempted with the help of one of our Trust Planning Attorneys. 

Real Estate and Multi-State Considerations

Each state where you own property may require separate probate proceedings, multiplying costs and delays. Trusts eliminate this problem by holding all real estate under one entity. Your successor trustee can manage properties in any state without additional court proceedings.

Texas and Arkansas residents who own vacation homes, investment properties, or family land in other states particularly benefit from trust-based planning.

Which Estate Planning Tool Has More Flexibility? 

Wills are much less flexible than trusts. Some people prefer them, thinking that having a will is a “set it and forget it” method of estate planning. However, even a will needs to be regularly updated with the help of an Estate Planning Attorney to account for changes in life circumstances, assets, family dynamics, and heirs. You can edit or revoke your will at any time while mentally competent. 

However, the document offers no protection if you become incapacitated. Incapacity triggers the need for guardianship proceedings. Your family must petition the court for authority to manage your affairs. This can create delays and expenses during an already stressful time.

Revocable trusts, on the other hand, offer greater flexibility and protection during your lifetime. With this estate planning tool, you can maintain control over your assets while serving as trustee. If you become unable to manage your affairs, your successor trustee can step in immediately without court intervention.

This feature makes trusts particularly valuable for business owners, providing seamless succession by:

• Avoiding probate delays that might affect business operations.
• Maintaining privacy about business structure and ownership.
• Allowing for sophisticated buy-sell arrangements.
• Providing management continuity during transition periods. 

Wills vs. Trusts: Beneficiary Protection and Control over Distribution

Wills typically distribute assets outright to beneficiaries once probate concludes. This approach works well when beneficiaries are mature adults capable of managing their inheritance responsibly.

Trusts allow for more sophisticated distribution schemes. For instance, if you require additional Asset Protection Plans for beneficiaries with substance abuse issues or creditor claims, a trust may be better suited to managing your estate. Additionally, many people rely upon a Special Needs Trust in order to create a plan for lifetime stewardship for loved ones with disabilities. Finally, for families with younger children, a trust might allow for staggered distributions based on age or educational milestones, as well as discretionary assistance based on financial need.  

These features prove valuable when beneficiaries are non-traditional, young, financially inexperienced, or facing personal challenges that might affect their ability to manage money wisely.

How Ross & Shoalmire, P.L.L.C., Creates the Right Estate Planning Solutions for Different Family Situations

As Estate Planning and Elder Law Attorneys, we offer specialized guidance across 40 counties in Texas and Arkansas. If you need help structuring a plan that’s attuned to you and your family’s unique needs, contact us today. Here’s a broad overview of some of what we have determined throughout our practice: 

Wills tend to work well for:

• Smaller estates, such as those under $200,000.
• Young families primarily concerned with naming guardians for children.
• People with straightforward asset distribution wishes.
• Individuals who prioritize lower upfront costs.
• Families with limited assets and uncomplicated situations.

Trusts benefit people with:

• Valuable real estate in multiple states.
• Business ownership interests.
• Concerns about family privacy.
• Desire to avoid probate delays.
• Minor children or beneficiaries with special needs.
• Assets exceeding simplified probate thresholds.
• Blended families with complex distribution needs.

Keep in mind: there’s no “one-size-fits-all solution” to estate planning. Our team believes in customizing the proper legal solutions to safeguard your needs now and your family’s future legacy.