Will vs. Trust? Which one do you need?
Living trusts and wills are both effective documents that will enable you to direct how your affairs should be handled after you die. The question is which do you need? Do you need one or both, and what is the difference between them?
What Is A Will?
Let’s say you’ve worked hard and saved some of your money. You’ve bought two properties and have several bank accounts. If you go ahead and make a will right now, it will simply serve as a set of instructions to the probate court. It doesn’t really help get you out of court.
Wills are legal documents that steers how your assets should be disposed of after you die. It is revocable and can be amended anytime. However, the will just tell the court what you would like. You still have to go through a procedure in the court called probate.
What Is A Trust?
Many people want to avoid the courts when dealing with their estates. What they’re really asking for is a trust–, a living trust. It is important to understand that a living trust takes you out of the field of probate, which is law-related by court supervision.
Meaning that with a living trust you are able to manage your property on your own, with an attorney, and without court supervision. The trust instrument provides a successor in the event that you die or are incapable of handling your affairs. The successor trustee will manage the trust property, and in so doing you can avoid the expense and inconvenience of the probate procedure.
Why Do I Need To Do Both?
A lot of people who create a trust also have another good question. Almost every time you make a living trust, you also make a will. This is confusing since I just told you not to make a will. So, why do you also need a will?
When you create a trust, you actually need to create a will as well. It is a special will called a pour-over will.
The pour-over will is a last will and testament, serving as a safety device to capture assets not transferred to or are included in the living trust. Imagine your trust is like a bucket or a treasure chest, and you have to fill up the bucket with all of your assets.
It might be that some of your assets are taken out of the bucket by accident. Maybe you re-financed your home and took it out of the trust. And once it’s taken out, you might forget to put it back into the bucket. Throughout all this, the assets are still yours no matter whether they are inside or outside of the bucket.
The pour-over will simply act as a safety net underneath your trust. In the end, it just pours all of the assets that have “poured out” of your bucket back into your trust. So yes, it is necessary. You need to still have a will, but it’s a different kind and style of will. But primarily, what you want is a living trust that’s drafted and customized perfectly for your situation.
Take the Proper Actions Today
Regardless of the complexity of your finances or the size of your assets, the decision to create a trust along with a will is important and should be discussed with an estate planning lawyer.
Aliav Law offers you informed advice to help meet your estate planning objectives.
You can make an appointment with an attorney by clicking the link below.https://aliavlaw.com/contact-us-2/
Aliav Law offers you informed advice to help meet your estate planning objectives. Call Aliav Law today at (310) 800 2911