I’m Confused: Do I Need a Will or a Trust?

There’s a lot of confusion about Wills and Living Trusts

Many of our proactive clients come into our office to create a Will or a Living Trust, but really don’t know which is appropriate for their needs. Most people these days use Living Trusts to avoid probate—and nobody wants to go through probate–but Living Trusts are more complicated to create, and they can’t name an executor or guardian for your children, so it’s necessary to create both a Will and a Trust.  But in a Trust-based Estate Plan, the Will merely supplements and supports the Trust–but it’s the Trust that’s the star of the show.

A Living Trust goes into effect immediately, while a Will takes effect only after someone dies. There are additional things to consider when thinking about a Will vs. a Living Trust.

A Will:

• Identifies who receives your property at your death and appoints an executor to carry out your wishes.
• Passes through probate—which means the court oversees the administration of the will and ensures the Will is valid and the property gets distributed the way the deceased wanted.
• Allows you to name a guardian for your children and to identify funeral arrangements. 
• Becomes a public record.

A Living Trust: 

• Can be used to begin distributing property before death, at death or afterwards.
• Is a legal arrangement where there is a relationship between a trustee and a beneficiary.
• Has two types of beneficiaries: one set that receives income from the trust during their lives and another set that receives whatever is left over after the first set of beneficiaries (who are usually the creators of the Trust) dies.
• Covers only property that has been moved into the Living Trust. For this reason, we include a “Pour Over Will” in all of our Estate Plans, the purpose of which is to transfer forgotten assets into the Trust even after death. Furthermore, we encourage our clients to update their Trusts when they get married or have children; they will also want to update the Trusts if they have made investments—these need to be moved into the Trust.
• Passes outside of probate, so a court does not need to oversee the process, saving significant time and money.
• Can be used to plan for disability or to provide savings on taxes.
• Is a private document.

We encourage everyone who has been procrastinating to come in to one of our California Document Preparers offices to create a Will or Living Trust. We make it easy to create this document that provides peace of mind for families.