A will and a living trust do not exclude each other. Both of these options have their merits and serve a purpose in preserving wealth and ensuring your estate is distributed as you like after you pass away. We have already written about the difference between wills and trusts, but in this post we will have a closer look at the interactions between wills and trusts.

Trust attorney San Diego explains: What are the advantages of trust?

A trust gives the grantor (the person who set up the trust) a much greater control over the way their assets are distributed to their heirs. For example, if a relative inherits something through a will, they become lump-sum beneficiaries. Sometimes, the grantor doesn’t wish their life’s work to be passed on immediately or until some conditions are met. By establishing a trust, the grantor can determine when their heirs get access to the inheritance and how they can use the assets.

If the deceased left a funded trust behind, the beneficiaries are able to access the funds immediately (unless the grantor specified otherwise). This is unlike the situation when there is only a will. In this case, the estate has to go through a probate, which is quite a lengthy and money-consuming process.

Trusts are also convenient if the grantor’s wish is to keep financial records private. A trust protects the estate from going to probate, and probate records are open to the public. Hence, trusts offer more privacy with regard to the decedent’s finances.

Trusts can have tax planning provisions, which could make tax savings possible. So, even though trusts may require more upfront effort and expense, they can also minimize the expenses after the grantor passes away because they eliminate court-related costs (probate) and they could reduce estate taxes.

Trust attorney San Diego answers: Do I need a will or a living trust?

A trust attorney is the best reference point for resolving any dilemmas like – should I have a trust, a will or both? Here some rough guidelines in the form of questions about your needs and circumstances. Remember that you are welcome to schedule a free 30-minute consultation with the Law Offices of Irina Sherbak. Have your questions answered by booking an appointment at 858-208-8900 today!

Does your estate qualify for a simplified probate? If you have a small estate, the assets could be transferred to your heirs with an affidavit.

Does the type of your property enable you to avoid probate without a trust? Some types of property do not go through a probate, so you don’t need a trust anyway. These are bank and retirement accounts, for example. These accounts can have beneficiary forms attached to them – transfer on death (TOD) and pay on death (POD).

Does your estate include more than one piece of real property? Multiple properties and outside-of-state properties would be easier to distribute through a trust.

Are you younger than 60? If you are in relatively good health, under 60 and if you have property that automatically avoids probate (e.g. TOD and POD accounts, property with joint tenancy ownership), drafting a will is a sensible idea. If you have minor children, your will could also specify who you’d want to be their guardian if you should die before they turn adults. However, a trust could also protect minor children.

Do you have dependents with disabilities? If yes, a trust would give you more control over how these heirs use the property after your passing. A special needs trust, included within a will, is probably best.

Do you have a large estate? Large estates are best preserved through a trust, because they would require a complex probate process which would significantly diminish the assets that the heirs will finally access. Joint tenancy ownership of major assets would also help avoid probate.

Do you want to reduce estate taxes? If there is a possibility that your estate will be subject to estate taxes, a trust with tax provisions could help reduce those taxes. However, the estate value threshold for taxes changes year in, year out.

Can you actively manage your estate plan? A trust would require a certain level of active engagement from you. If you don’t think you have the time or inclination to take on such a responsibility, a will could be better for you (but the probate process could mean your heirs gets less, as we have explained previously).

Trust attorney San Diego elaborates: Can a will override a trust?

Once a living trust is set up, it becomes operative. The will, on the other hand, comes into effect only once the testator passes away. If there is a conflict between the trust and the will, the trust has precedence.

It is important to note, however, that the trust only controls the property and assets that are transferred to it. In other words, the provisions of the trust agreement do NOT affect properties not funded in the trust, even if they are listed in it.

What sometimes happens is people have trusts set up, and then they make a will assuming that everything will follow as outlined in the will. However, if the will extends to property funded in the trust, it will have no bearing on that property. The property funded in the trust will pass on the beneficiaries of the trust, as outlined in the trust agreement.

The crucial point here is: wills deal with the individual’s personal property.  But, property funded in a trust is not considered the decedent’s personal property (that’s the main reason why it doesn’t go through probate).

If there’s a clash between the trust and the will, the property funded in the trust will follow the provisions of the trust, not the will.

Book your free, no-pressure 30-minute consult today!

The above information is by no means extensive and comprehensive. It’s not intended as legal advice, and it serves mere informational purposes. For any questions you may have, it’s best you ask a reliable and reputable attorney experienced in estate planning. Don’t hesitate to contact the Law Offices of Irina Sherbak for a 30-min consultation, free of charge and obligation, at 858-208-8900. We’re here to help you!