Wills and Trusts
Estate planning is one of the kindest and smartest things you can do for your loved ones, regardless of your age or the property you own. Once you draft the necessary legal documents, you will have time to make improvements or revisions as time goes by. Estate planning allows you to rest assured that your property will be distributed according to your wishes after your death.
When you undertake to create your foundational estate plan, you have several options. You have the option of creating a will or creating a will and a revocable living trust. These options can be confusing, and it helps to understand which is best used in certain situations. Consequently, you may wonder if:
I Have A Will. Do I Need a Trust?
Laws vary in different states. In general, if your property, assets, and belongings are titled in your name upon your passing, they cannot be transferred to the individuals or organizations named in your Last Will and Testament without the estate being subject to probate. Probate is the legal process of proving to the court that a will is valid so that the decedent’s wishes can be carried out. Probate proceedings can be costly, and a significant amount of paperwork must be filed with the court. In many cases, probate proceedings take a minimum of 4 to 6 months to complete.
Certain assets titled in the name of a revocable living trust are not subject to probate upon your passing. These assets may include:
- Life insurance policies
- Retirement plans with a named beneficiary
- Property held as community property with right of survivorship or in joint tenancy
- Property titled in the name of a revocable living trust
For this reason, many individuals have elected to form a revocable living trust. They transfer their assets, such as bank accounts, homes, and brokerage accounts, to their trust. This minimizes and potentially eliminates the need for probate proceedings.
I Have a Trust, Do I Need a Will?
There are at least three significant reasons you need a will. These are worthy of consideration even if you have already established a revocable living trust.
1. Your Last Will and Testament is a legal document that appoints your personal representative, or executor. An executor is the person you select to handle specific administrative tasks in the estate, such as handling debt and creditor claims or filing the necessary final income tax returns.
2. If the event that you have minor children, your will appoints a guardian and conservator for those children.
3. If you have established a revocable living trust, your will directs your executor to pay any property titled in your name to the trust. This situation is named a “pour-over will.” This document ensures that the property is given to the beneficiaries you named in your trust.
In other words, you can make a will, or you can create a will and a revocable living trust; however, you should probably not make a revocable living trust without a will. To get started on your foundational estate planning documents, contact an estate planning lawyer, like an estate lawyer in Allentown, PA, and schedule a consultation.
Thanks to Klenk Law for their insight into whether you should create a will or a trust.