About the most frequent misperceptions in estate planning that people tell us in our office are the following: you do not need a last will and testament if you have a revocable trust. The principal distinction between a trust and a last will and testament rests on the name change of your property after your death. This article shows the basic reasons why you would need a will and a trust and how the document differences play out to keep your assets safe for the next generations.
What Is Meant by Last Will and Testament?
A will; also known as the last will and testament, is a legal document drawn by a person which details what should be done to his properties after his death. It enables an individual to nominate who he or she wishes to be his or her beneficiary and in what manner and any conditions regarding sharing of the property. It may also name an executor, who is the person who handles the property and sees that the instructions in the will are followed. A will can also contain other specific information, for example, on the appointment of guardians of minor children. In order for a will to have legal force, it has to meet certain qualifications which are nevertheless often country-specific. Most people should seek legal advice on wills, to make sure that the document is legal and suits the needs of the creator.
Last Will and Testament vs. Trust?
The greatest separation between a will method and a trust method is on the division of your property upon your death. Regarding the will, when you have one, Court supervision alone can be able to validate the Will. This process is called probate. A trust, on the other hand, directs that asset be passed to your beneficiaries at your demise. This saves the privacy of your wishes, and is also more convenient and less costly for your heirs than having to go to probate court. A will is a quite plain kind of a contract that outlines how the personal property should be divided after the death of an individual.
You have heard people say you should flip your life upside down, well, just consider for a moment if you could really do that to your house; literally. All those things which can be easily dropped on the floor such as jewelry, baseball cards, toaster and so on are your tangible personal property. However, in the case of a trust as a legal instrument it is a significantly more complex document. A trust shields any property that is registered in the name of the trust. This can include your house, and your cash, which is passed by joint tenancy mechanism to the name of the beneficiary at your demise. This is why a trust probably eliminates the need to go to probate court.
Why Do I Need Both?
A number of clients have asked, “If, for instance, a trust is better with regard to the transmission of my property, then why do we need both?” A will and a trust work hand in hand. A peanut butter sandwich is desirable, a jelly sandwich is acceptable while a PB&J is better than both. They are different, but they are created to be a matching sandwich; your estate plan is the same.
We’re Here to Help We remind our clients over and over that a will is not enough to avoid probate but they don’t think they need more than a trust. Trusts and wills are like peanut butter and jam, they are a pair that goes together; both are components of your estate planning mix. For more information on the distinction between wills and trusts, you can book your free personal family legal session
