Estate planning involves making important decisions about how your assets will be distributed after your passing. Two common estate planning tools are trusts and wills. Many people wonder whether a trust overrides a will or vice versa. We will discuss the relationship between trusts and wills and shed light on how they work together in ensuring your wishes are carried out effectively.
1. Understanding Wills and Trusts
Wills: A will is a legal document that outlines how you want your assets distributed after your death. It allows you to name beneficiaries, appoint an executor to handle the distribution, and even designate guardians for minor children.
Trusts: A trust is a legal arrangement that holds assets for the benefit of beneficiaries. It involves three parties: the grantor (the person who creates the trust), the trustee (the person responsible for managing the trust), and the beneficiaries (those who will receive the trust’s assets).
2. Coexistence of Wills and Trusts
Wills and trusts can coexist in an estate plan, and they serve different purposes.
Wills: A will covers assets that are solely in your name at the time of your passing. It is essential for stating your wishes regarding personal possessions, naming guardians for children, and distributing assets that are not part of a trust.
Trusts: A trust, on the other hand, holds assets during your lifetime and can continue to do so after your death. It can be revocable or irrevocable, depending on whether you can modify it after its creation. A trust can help manage assets, avoid probate, and provide ongoing support to beneficiaries.
3. Interaction Between Wills and Trusts
In most cases, a trust and a will work together to ensure comprehensive estate planning.
Pour-Over Will: When a trust is part of your estate plan, you typically have a “pour-over will” that acts as a safety net. This will directs any assets that were not transferred to the trust during your lifetime to “pour over” into the trust after your death.
Assets Outside the Trust: Assets that are not titled in the name of the trust, not designated as trust assets, or not transferred into the trust during your lifetime will generally pass through the probate process and be subject to the directions in your will.
4. The Benefits of Having Both a Trust and a Will
Having both a trust and a will can provide several benefits:
Probate Avoidance: Assets held in a trust generally avoid probate, saving time, and potentially reducing costs.
Privacy: A trust allows for a more private distribution of assets since it does not become a public record like a will does in probate.
Flexibility: A will can cover assets that are not part of the trust and provide flexibility in case you need to make changes to your estate plan.
Guardianship Designations: A will is essential for appointing guardians for minor children, which cannot be done through a trust.
Get Help Today & Consult With An Estate Planning Attorney
In summary, both a trust and a will play vital roles in crafting a comprehensive estate plan. While a trust effectively manages and retains control over assets throughout your lifetime, possibly avoiding probate, a will is essential for distributing assets not included in the trust. For a personalized estate plan that caters to your specific requirements, seeking guidance from a seasoned estate planning attorney is highly recommended. We will offer you the support and guidance you need at Hurban Law.
