Will vs. Trust: Which Do You Actually Need?

By Amber Otting | Otting Financial Coaching | Ramsey Preferred Coach

You’ve spent years working hard, paying down debt, and building a life worth protecting. But here’s a sobering statistic: only 45% of Americans have any estate planning documents at all. That means most families have nothing in place to protect what they’ve built — and no instructions for what happens if they’re gone.

Two of the most common estate planning tools are a will and a trust. They sound similar, but they do very different jobs. Knowing which one you need — and when — is one of the most loving things you can do for your family.

What Is a Will?

A will (formally called a last will and testament) is a legal document that outlines how you want your assets distributed after you die. It’s the foundation of almost every estate plan — and for most people, it’s all they need to start.

A will lets you:

• Name who inherits your property, money, and belongings
• Appoint an executor to carry out your wishes
• Name a guardian for your minor children — this is the only document that can do this
• Provide instructions for paying debts and taxes

The trade-off? A will goes through probate — a court-supervised process that validates your will and oversees distribution of your estate. Probate can be slow, costly, and public, particularly in states like California. If you own assets in multiple states, your executor may have to initiate probate in each one.

Dave Ramsey’s take: If your estate is smaller and fairly simple, a will is likely the best option. For most people — especially those in Baby Steps 1–5 — a simple will is the right starting point.

What Is a Trust?

A trust is a legal arrangement where you transfer ownership of assets to a trust — managed by a trustee — for the benefit of your beneficiaries. Unlike a will, a trust takes effect the moment it’s funded, even while you’re still alive.

A trust lets you:

• Bypass probate entirely — assets transfer directly to heirs without court involvement
• Keep your estate private (wills become public record during probate)
• Control when and how heirs receive assets (helpful for minor children or complex situations)
• Plan for incapacity — a successor trustee can step in without waiting for a court ruling

The most common type is a revocable living trust, which allows you to add, change, or remove assets at any time. You remain in control while you’re alive — but the trust takes over seamlessly if something happens to you.

Important note: Retirement accounts should not be placed directly in a trust — doing so could trigger unintended tax consequences. Keep beneficiary designations on those accounts current and aligned with your estate plan.

Will vs. Trust: The Quick Comparison

📋  Will

• Takes effect after death
• Goes through probate
• Becomes public record
• Can name guardians for minor children
• Simpler and less expensive to create

🏛️  Trust

• Takes effect when funded (can be during your lifetime)
• Bypasses probate
• Stays private
• More control over when/how assets are distributed
• More complex and more expensive to set up

Can You Have Both?

Yes — and many people do. A trust often works alongside a pour-over will, which acts as a safety net: anything you own outside your trust at the time of death automatically “pours over” into the trust. This ensures nothing falls through the cracks.

Even if you have a trust, a will is still important — especially for naming guardians for minor children, which a trust cannot do on its own.

Which Do You Need? Start Here.

You probably need a will if you:

• Are married, have kids, or own property
• Have less than $1 million in assets
• Have a relatively straightforward estate
• Are in Baby Steps 1–5 and just getting started with estate planning

You might be ready to discuss a trust if you:

• Have a large or complex estate
• Want to avoid probate and keep things private
• Have minor children or a beneficiary with special needs
• Own property in multiple states
• Are in Baby Steps 6–7 and actively building generational wealth

Not sure which fits your season? Dave’s Will vs. Trust quiz can help you decide: ramseysolutions.com/retirement/will-vs-trust

The Bottom Line

Proverbs 13:22 says, “A good person leaves an inheritance for their children’s children.” You’ve worked too hard to leave your legacy to chance.

Don’t have a will yet? Start there — today. Dave’s RamseyTrusted provider Mama Bear Legal Forms makes it fast and affordable. Use code RAMSEY10 for 10% off.

Already have a will but wondering if a trust is next? That’s exactly the kind of conversation I love having with clients. Schedule a free consultation: calendly.com/amber-otting/consultation or visit my Dave Ramsey RPC Coaching page.

Resources

• Ramsey Solutions — Will vs. Trust: What’s the Difference?
• Ramsey Solutions — Will vs. Trust Quiz
• NerdWallet — Will vs. Trust: Which Do You Need?
• Charles Schwab — Revocable Living Trust vs. Will
• FindLaw — Estate Planning vs. Wills vs. Trusts

Full Disclaimer: Investing involves risks; past performance is not indicative of future results. Consult a qualified professional before making financial decisions. This content is for educational purposes only and does not constitute personalized financial, legal, or tax advice. For investment-specific guidance, visit Blueprint Investments and Tax Planning. This article should not replace advice with an estate lawyer.