Which of the following represents a key financial difference between living trusts and traditional wills?

The correct choice highlights a key financial difference between living trusts and traditional wills. A living trust often involves higher initial setup costs due to the complexity involved in creating it. This complexity can stem from the need for detailed legal documentation and the potential requirement for more sophisticated management of the trust's assets, which typically necessitates the aid of legal professionals, thereby increasing the setup costs compared to a traditional will.

In contrast, while traditional wills are generally simpler and less costly to draft, they may not offer the same level of benefits in terms of avoiding probate or managing asset distribution during the testator’s lifetime. Therefore, even though a living trust may be more expensive initially, it can provide significant advantages in wealth management and protection, which may justify its costs in the long run.

The other descriptions do not accurately reflect the financial differences between the two estate planning tools. For instance, the claim that a living will is less costly or more complex does not universally apply, as the cost and complexity can vary significantly based on individual circumstances. Additionally, while both living trusts and wills often require witnesses in some contexts, this is not a distinctive financial consideration that sets them apart.