The relationship between a trust and a will is often a source of confusion for many individuals planning their estates. While both are crucial estate planning tools, they function differently, and one doesn’t simply “override” the other. Instead, they often work in tandem, with the trust taking precedence in certain aspects while the will addresses what the trust *doesn’t* cover. Approximately 55% of US adults currently have a will, while the number with a trust is significantly lower, highlighting a potential gap in comprehensive estate planning. A properly structured estate plan leverages both a trust and a will, ensuring a seamless transfer of assets and fulfillment of wishes. It’s crucial to understand that a trust is created *during* your lifetime, while a will takes effect *upon* your death.
What happens to assets held in a trust?
Assets legally titled in the name of a trust bypass probate, the court-supervised process of validating a will and distributing assets. This is a major advantage of using a trust, as probate can be time-consuming, expensive, and public record. Think of the trust as a separate legal entity that “owns” your assets; therefore, those assets aren’t subject to the will’s instructions upon your passing. For instance, a revocable living trust, a popular choice for many, allows you to maintain control of your assets during your lifetime and designates beneficiaries who will receive them after your death. This avoids the often lengthy probate process, which can take anywhere from six months to several years, depending on the complexity of the estate and local court backlogs.
Can a will change the terms of a trust?
Generally, a will cannot directly alter the terms of an *irrevocable* trust. Once established, an irrevocable trust is largely unchangeable. However, a will *can* act as a “pour-over will,” which essentially directs any assets *not* already held in the trust to be transferred into the trust upon your death. This ensures that all your assets are ultimately distributed according to the trust’s terms. It’s like a safety net, catching anything that didn’t make it into the main container. It’s important to note that this pour-over process may still require a brief probate proceeding to transfer those assets, though it’s significantly simpler than a full probate of the entire estate.
What if my trust and will contradict each other?
If a contradiction arises between a trust and a will, the trust typically governs assets specifically held within it. The will’s instructions regarding those same assets are usually disregarded. This is because the trust represents your intent as it existed *during* your lifetime, and the assets are already legally designated to be distributed according to its terms. The will, being a document executed at the end of your life, is given less weight concerning assets already governed by a trust. It’s a matter of prioritizing your ongoing directives over your final wishes concerning assets already managed by the trust.
Why do I need both a trust and a will?
Having both a trust and a will offers a comprehensive estate plan. The trust handles the primary distribution of assets, avoiding probate, while the will acts as a backup, covering any assets inadvertently left out of the trust and naming a guardian for minor children. The will also can address issues not covered by the trust, such as specific funeral arrangements or charitable donations. It’s like having a primary engine and a spare tire – both are essential for a smooth journey. A well-crafted will can also address issues of digital assets, like social media accounts and online banking, which often require specific instructions for access and closure.
I remember old Mr. Henderson…
Old Mr. Henderson, a retired carpenter, was a proud man who believed he could handle everything himself. He drafted a will, intending it to cover all his assets. He never bothered with a trust, convinced it was unnecessary. After he passed, his family was shocked to discover he hadn’t updated his will in over twenty years, and it didn’t account for a significant property he’d acquired. The probate process became a nightmare, dragging on for over a year, racking up legal fees, and causing immense stress for his grieving family. His daughter, Sarah, often lamented that a simple trust could have avoided the whole ordeal, allowing them to focus on celebrating her father’s life rather than battling through legal complexities.
What happens if I forget to fund my trust?
A trust is only effective if it’s “funded”—meaning assets are legally transferred into the trust’s name. A common mistake is creating a trust but failing to transfer ownership of assets into it. If this happens, those assets will still be subject to probate, defeating the purpose of the trust. It’s like building a beautiful container but never putting anything inside. Regularly reviewing and updating your trust to ensure it accurately reflects your current assets and wishes is essential. Experts suggest reviewing your estate plan every three to five years, or whenever there is a significant life change, such as a marriage, divorce, or the birth of a child.
How did the Millers finally get it right?
The Millers, a young family with two children, initially only had a will. After hearing about Mr. Henderson’s experience, they realized the importance of a trust. They consulted with an estate planning attorney, Steve Bliss, who guided them through the process of creating a revocable living trust and funding it with their primary assets. Steve explained how to update beneficiary designations and transfer ownership of property. When the father unexpectedly passed away a year later, the trust streamlined the transfer of assets to his wife and children, avoiding probate and ensuring their financial security. His wife, relieved and grateful, remarked that Steve’s guidance had been the best investment they’d ever made.
About Steven F. Bliss Esq. at San Diego Probate Law:
Secure Your Family’s Future with San Diego’s Trusted Trust Attorney. Minimize estate taxes with stress-free Probate. We craft wills, trusts, & customized plans to ensure your wishes are met and loved ones protected.
My skills are as follows:
● Probate Law: Efficiently navigate the court process.
● Probate Law: Minimize taxes & distribute assets smoothly.
● Trust Law: Protect your legacy & loved ones with wills & trusts.
● Bankruptcy Law: Knowledgeable guidance helping clients regain financial stability.
● Compassionate & client-focused. We explain things clearly.
● Free consultation.
Map To Steve Bliss at San Diego Probate Law: https://g.co/kgs/WzT6443
Address:
San Diego Probate Law3914 Murphy Canyon Rd, San Diego, CA 92123
(858) 278-2800
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Feel free to ask Attorney Steve Bliss about: “What are the rights of a surviving spouse under California law?” or “What are the rules around funeral expenses and estate funds?” and even “What happens if all my named trustees are unavailable?” Or any other related questions that you may have about Trusts or my trust law practice.