We find in our wills, trusts, and probate practice that clients frequently think they need only a Will (“Last Will and Testament”) or only a trust (“Living Trust” or “Revocable Living Trust” referred to here as a “Trust”).
We firmly believe that a person’s estate plan is best served by having both a Will and a Trust.
Peanut butter and Jelly.
Think of Wills and Trusts for a minute like a peanut butter and jelly sandwich.
You could have a peanut butter sandwich without the jelly.
Or you could have a jelly sandwich without the peanut butter.
But in either case, something would be missing.
When you have both, you have a complete – a wonderful – sandwich. The sandwich just works so much better when you have peanut butter and jelly.
Wills and Trusts are a little like that too.
Probate is the primary reason why you should have both a Will and a Trust.
Because when an estate ends up in probate, it’s not an “all or nothing” proposition. Not all assets (i.e., real and personal property) will pass through probate. Only certain assets will go through probate.
For example, life insurance proceeds do not go through probate. They are passed directly to the named beneficiary (if there is no named beneficiary then it would go through probate). Similarly, jointly owned property will not pass through probate. It will go (either in whole or in part) to the named joint owner (but only if they survive the decedent).
What this means, then, is that a Will does not keep your assets/estate out of probate. If you have a Will, any assets that are:
- Not jointly owned, or
- Do not have a (surviving) beneficiary named, or
- Are not titled in a Trust,
Are going to have to go through probate.
That’s why you need a Trust.
A Trust can capture all of the assets that would normally have to pass through probate and can distribute them according to your wishes.
A trust is a written agreement between you (the “grantor”, “settlor” or “donor”) and the people who will benefit from the trust (i.e., the “beneficiaries”). Trusts are administered by a trustee (usually you during your life, then someone you have named to administer the trust after your death).
When you die, the Trust’s terms control how the assets placed in the trust (i.e., money and property) are distributed. Because it is a flexible estate planning tool, a Trust can help you do things like avoid probate and provide protection from creditors (among other things). And because the trustee of the trust (or successor trustee) is the legal owner of the property in the trust, when you die, your assets do not have to go through the probate court.
So when you are planning your estate, have your trusts and estates counsel prepare both a Will and a Trust for you.
Why do I need a Trust if I have a Will?
The Trust can only control assets that are owned by the Trust. So, if you forget to name a beneficiary on your bank account and you haven’t re-titled it in your Trust, then it will go through probate. So even though you had a Trust, it has no effect on your bank account. Usually when someone has both a Will and Trust, the Will is referred to as a “Pour-Over Will”, meaning that the assets will “pour-over” into your Trust.
Protecting Your Family is Just a Phone Call Away.
Don’t leave planning for your future and that of your loved ones to chance. All it takes is one phone call to the Law Offices of Samantha J. Fitzgerald to ensure that your wishes will be followed and your loved ones taken care of when you are gone. We expertly guide individuals through the complex probate process, and capably handle all aspects of the creation, administration, and settlement of trusts as well. When you work with the estate planning attorneys at the Law Offices of Samantha J. Fitzgerald, you get more than just an estate plan: you get peace of mind. Call us at 954-580-3690 or email us at: [email protected] today.