How to Know if You Need a Will or a Revocable Living Trust

How to Know if You Need a Will or a Revocable Living Trust: The Best Guide for Investors and Business Owners in 2025

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Why Listen to Me?

In my experience working with investors, business owners, and families navigating estate planning, I’ve found that few financial topics cause more confusion than whether to rely on a will or a revocable living trust.

Investors I’ve worked with often arrive with two big misconceptions:

That trusts are only for the ultra-wealthy, or

That simply having a will keeps your family out of probate court.

Both are wrong—and in some cases, expensive mistakes.

I’m sharing this guide because, in my experience, clarifying these differences is one of the most powerful ways to protect your legacy, your privacy, and your family’s peace of mind.

Key Takeaways

A will only takes effect at death and guarantees probate.
A revocable living trust takes effect immediately and can help avoid probate and protect privacy.
Trusts are not only for the wealthy; they’re a tool for control, efficiency, and incapacity planning.
Costs of setting up a trust have dropped significantly due to new technology—but failing to plan could cost far more.
Business owners often benefit significantly from trusts, especially to keep business operations running if they become incapacitated.

Why Do People Ask: “Do I Really Need a Trust?”

I’ve found investors, even high-net-worth individuals, often hesitate to create a trust because:

It sounds expensive.
It sounds complicated.
They think it’s only for “rich” families.
They assume a will avoids probate.

But here’s the reality:

“A revocable living trust isn’t about giving up control—it’s about keeping it.”

Let’s dig deeper into how to decide between a will and a revocable trust, the misconceptions that get people into trouble, and how to protect your estate.

Misconception #1: “If I Have a Will, My Estate Avoids Probate.”

Understanding Wills

A will:

Only takes legal effect after you die.
Must go through probate—a court-supervised process—to validate it.
Is publicly filed, meaning anyone can eventually read it, including your beneficiaries, creditors, ex-spouses, or journalists.

Problems with relying solely on a will:

✅ Simpler document and cheaper up front.

❌ Guarantees probate fees and delays.

❌ No protection for incapacity during your lifetime.

❌ Public record—no privacy.

In my experience, many investors mistakenly believe:

“I have a will, so my estate is settled automatically.”

Not true. A will is essentially instructions for the probate court. It doesn’t bypass the system.

Misconception #2: “Trusts Are Only for Rich People.”

Understanding Revocable Living Trusts

A revocable living trust (sometimes just called a “living trust”) is:

A legal document you create while alive.
Immediately effective—not waiting for your death.
Revocable, meaning you can change it, update it, or revoke it entirely.
A private tool to transfer assets upon death.
Able to hold your assets during incapacity, so a trusted person (your successor trustee) can step in and manage things for you.

In my experience, even people of modest means benefit from a trust if they:

Live in a state with expensive or slow probate.
Own property in multiple states.
Want to keep financial affairs private.
Own a business that must keep operating if they become incapacitated.
Have blended families and want to ensure children from prior marriages are protected.

Pros of a revocable trust:

✅ Avoids probate for assets titled to the trust.

✅ Privacy—keeps your estate out of public record.

✅ Streamlined transfer of assets.

✅ Allows incapacity planning.

✅ Makes multi-state property ownership much easier.

Cons of a revocable trust:

❌ Higher upfront cost than a simple will (though falling fast with modern legal tech).

❌ Requires funding (transferring assets into the trust).

❌ Offers no tax savings or asset protection by itself while you’re alive.

Misconception #3: “Trusts Mean Giving Up Control.”

Investors sometimes say to me:

“I don’t want a trust because I don’t want to give up control over my money.”

That’s another misunderstanding. With a revocable trust:

You remain the trustee. You control the money.
You can change or cancel the trust any time.
You still use the assets as you always have.

In other words:

“A revocable living trust isn’t about locking away your money—it’s about planning who manages it if you can’t.”

Misconception #4: “Trusts Avoid All Family Disputes.”

Even with a trust, beneficiaries can still challenge your wishes. However, a trust makes it harder and more expensive for them to contest your plan.

In my experience, trusts:

✅ Lower the chances of a court battle.

✅ Reduce public records that might encourage legal challenges.

❌ Do NOT make you immune to contests or legal fights, especially in complex family dynamics.

Cost and Pricing: Are Trusts Worth the Money?

Many investors ask:

“Why pay $1,500 - $5,000+ for a trust when a will is a few hundred bucks?”

Here’s why:

Probate fees, including court costs and attorney fees, often run between 3% and 7% of your estate’s value. If your estate involves property in multiple states, you could face several thousand dollars in extra costs for each state. Legal delays can stretch anywhere from 12 to 24 months or longer, and the process also exposes your personal and financial details to the public, leading to a significant loss of privacy.

On even a $500,000 estate, probate costs alone could add up to $15,000 to $35,000 or more. Meanwhile, the cost of setting up a trust has become much more affordable. Many trusts can now be created for $1,500 to $3,500, thanks to online platforms and law firms leveraging technology—a fraction of what probate might ultimately cost.

Business Owners: The Hidden Reason You Need a Trust

One of the biggest unique insights I’ve found as a financial adviser:

“If you own a business—even a small LLC—a trust may be the single most important estate document you have.”

Why?

Your business may grind to a halt if you become incapacitated.
A power of attorney may not always be accepted by banks, partners, or vendors.
Probate can tie up ownership for months, damaging relationships and cash flow.

How Business Owners Fund a Trust

Funding your business into your trust means:

Updating your LLC operating agreement or corporation bylaws to allow ownership in the name of your trust.
Officially transferring your membership interest or shares into the trust name.
Avoiding conflicts among partners who might otherwise refuse to recognize your successor trustee.

In my experience, many business owners fail to take this final step, leaving their trust unfunded—and useless when they need it most.

When Should You Absolutely Consider a Revocable Trust?

From what I’ve seen, you should strongly consider a trust if you:

✅ Own real estate in more than one state.

✅ Are concerned about privacy.

✅ Have a blended family.

✅ Have a business or LLC.

✅ Want to protect loved ones from court delays.

✅ Want a seamless incapacity plan.

✅ Simply hate the idea of your financial details becoming public record.

The Role of a Pour-Over Will

Even if you have a revocable trust, you still need a will.

This special document is called a “pour-over will.”

Its purposes:

Names guardians for minor children.
Transfers (“pours over”) any assets you forgot to retitle into the trust.
Appoints someone to handle any leftover estate matters.

So yes—you still sign a will even with a trust. It’s just a backup to clean up loose ends.

The Best Way to Get Started

In my experience, the biggest mistake is procrastination. Here’s how to get started:

Meet with an estate attorney or your financial adviser.
Review your assets, property locations, and business holdings.
Discuss your goals: privacy, family dynamics, incapacity planning.
Understand the cost upfront versus potential probate costs.
Decide whether a trust is right for you.
Fund your trust. A trust only works if you retitle assets into it.

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FAQs

Q: Do I need both a will and a trust?

Yes. If you have a revocable trust, you still need a pour-over will to catch anything you forgot to fund into the trust and to name guardians for minor children.

Q: Does a trust help me avoid estate taxes?

A basic revocable trust by itself doesn’t save estate taxes. It’s primarily about avoiding probate and providing privacy. For tax savings, you’d look into irrevocable trusts or other strategies.

Q: Is a trust only for wealthy people?

No! In my experience, middle-class families often save the most hassle and cost by avoiding probate through a revocable trust, especially in expensive probate states like California, New York, or Florida.

Conclusion

A will is a good start—but for many investors, it’s not enough.

A revocable living trust is one of the most powerful tools to:

✅ Avoid probate.

✅ Keep your financial life private.

✅ Make incapacity planning seamless.

✅ Protect business continuity.

If you want peace of mind—for your family, your business, and your legacy—a trust may be one of the smartest investments you make.

👉 Want to learn how to retire with confidence? Click here to watch this video

Disclaimer: Case studies are hypothetical and do not relate to an actual client of Lock Wealth Management. Clients or potential clients should not interpret any part of the content as a guarantee of achieving similar results or satisfaction if they engage Lock Wealth Management for investment advisory services.