Wills and trusts are two common estate planning tools. With both a will and a trust, you can ensure your family will be protected after your death by making sure they receive your hard earned assets. Each of these estate planning tools, however, have benefits and drawbacks.
Wills
A will is a legal instrument that you can use to name an executor to your estate and gift your assets to your named heirs. A will is used to control all probate assets, including personal property, real property, and financial accounts. In California, when the decedent’s estate is valued at $150,000 or more, then the will must go through court supervised probate. Probate is a potentially lengthy process that starts with the will being filed in court. The named personal representative will inventory and appraise the assets within the will and settle the estate so that assets can be distributed in accordance with the terms of the will.
Trusts
A trust is a contract between the settlor or trust creator and the trustee, or individual who holds the trust property for the benefit of named beneficiaries. A trust must be properly funded to commence. If the settlor becomes disabled or dies, the new trustee will take over and administer the trust according to its terms. Trust assets DO NOT need to go through probate.
So Which One Do I Need?
Often, the answer is both. With just a will, your assets will need to go through probate, which will cost money and time. A trust can allow for ease of transfer of assets and save heirs from considerable fees. A trust, however, manages just those assets that you place within it. This could leave some assets out. Your will is essential for distributing any assets which were not put in the trust. Consult with Dallara Law for individualized assistance with your estate plan.