What is a Will?
A will leaves instructions to be carried out after you are gone. Usually, these instructions involve which people or charities should receive your property. In California, you can also use your will to name an executor to carry out the will’s instructions, a guardian for your underage children, and the beneficiaries who will receive your personal property, financial assets and real estate once you are gone. If your assets are listed only within a will, they will be subject to probate upon your death. Probate is a court-supervised process for transferring assets to the beneficiaries listed in one’s will, and usually takes some time and money to complete.
What is a living trust?
A living trust is a written legal document that partially substitutes for a will. With a living trust, your assets (home, bank accounts, stocks, possessions, etc.) are put into the trust before your death, administered for your benefit during your lifetime, and then transferred to your beneficiaries when you die. Living trusts provide a way to pass property to the trust’s beneficiaries when you die without the need for a will or the probate process.
Combining a Will and Living Trust
California law allows for both a will and a living trust to work together. One benefit of using both is that the will allows you to xname your executor and a guardian, but the trust allows you to pass your property directly to your beneficiaries without going through probate. One situation in which combining a will and living trust may be helpful is when you have young children. In this case, the will names the children’s guardian, while the trust provides funds for the children’s care or for future expenses, like a college education.
The disadvantages of a living trust
While the probate process involves direct court supervision of an executor, a living trust is not under direct court supervision. So it is entirely possible for a trustee not to act within your best interest or in the interests of your beneficiaries once you are gone. In addition, the cost of preparing a living trust could be higher than the cost of preparing a will. Also, keep in mind that a living trust creates additional paperwork and complexity for the living trust maker.
In many respects, a living trust and a will accomplish similar objectives. A trust, however, may provide your estate with greater advantages than a will alone. Whether or not a living trust is better for you than a will may depend on whether the additional advantages are worth the cost. Your estate plan should be prepared in a way that best meets the needs of you and your family.
Contact the Pasadena living trusts experts at The Law Offices of Christopher B Johnson today to learn more about wills and living trusts for your estate.