Wills and trusts are legal documents used for your estate plan. Estate planning helps ensure your assets are protected and properly distributed to your children and protects them from estate tax liability. The Alden Law Firm has an experienced estate planning attorney to give you the legal advice you need for your estate plan.
Wills are legal documents that determine how you want to distribute your property after death. Wills are used when there is no living trust. Although wills are often associated with the passing of an individual, they can also be written up in anticipation of future events.
Meanwhile, living trusts are also legal documents that allow you to manage your property while you are still alive. It must be executed with at least two witnesses during your lifetime to become valid. However, once the initial documents have been created and signed, they usually need to be submitted for approval.
What Is a Will?
Simply put, wills are legal documents that dictate how a person’s assets should be distributed after their death. Typically, a will appoints an executor who will oversee the distribution of the deceased’s probate estate following the will’s terms.
These wills can also be used to create trusts, legal entities that manage assets on behalf of beneficiaries.
Trust assets are not subject to probate to be distributed by the probate court more quickly and efficiently than other types of property.
For this reason, many people use wills to establish trust funds for their children or other loved ones. It is a legal document that can help your minor children receive care after you pass away.
Guardianship of Minor Children
There are many forms of estate planning, but one of the most important is deciding how you want to protect your children if you should die before they are grown up. A guardianship is a legal relationship between one adult and another, usually a minor child.
Parents appoint a guardian in their will or living trust before they die before their children reach adulthood. The appointed guardian has the power to make decisions for the child, including education, religion, health care, and other essential matters. If something happens to the parents and there is no appointed guardian, the court will step in and appoint someone to take on that role.
Disinheritance is a term used by estate planning attorneys to describe the refusal of an inheritance. The reasons for disinheritance vary and can be placed under two categories: intentional and unintentional.
- Intentional reasons might include:
- The Beneficiary has a history of drug abuse, and the testator wishes that behavior continue to prevent addiction; or
- Assets are held in trust for minors, usually with funds set aside specifically to help them get through college. If adult children choose not to further their education, they will receive no additional money.
- Unintentional reasons might include:
- Lack of communication between parent/child; or
- The child is estranged from the parent.
Disinheritance is a permanent decision and cannot be reversed without changing the will or living trust. Suppose you are considering disinheriting a loved one. In that case, it is crucial to speak with an estate planning attorney to discuss your options and the potential consequences.
A Will Takes Effect After Death
Many people do not realize that a will does not take effect until the person who made it has died. Wills are often used to inform loved ones of your last wishes, but they are only relevant once you are deceased.
It may be advisable to make a will that provides some contingency should you outlive your assets or fail to plan for incapacity early enough. Wills can be effective before death in some cases to avoid taxation consequences at death or where required under state law to permit someone’s continuing care during a health crisis or incapacity.
What Is a Trust?
Trusts are legal documents allowing you to give someone else control over your assets. You transfer legal ownership of your assets to the trust when you create a trust. The person who controls the trust, also known as the Trustee, can use those assets for your benefit.
There can be a few reasons to create a legal Trust document. One reason is that trusts can be used to avoid estate taxes. Trusts can also be helpful for estate planning since they can help you distribute your assets to your loved ones after you die.
A revocable living trust, much like a will, covers three primary areas:
- Distribute assets at the time of death
- Establish guardianship for minors who inherit assets
- Designate someone to make financial decisions should the trustor become incapacitated
However, unlike wills, which only hold sway after the creator’s death, living trusts take effect as soon as they are created. These living trusts can manage assets during the creator’s lifetime. The most significant benefit of it is that it can help you avoid probate.
Probate is a legal process wherein the court determines who should inherit the deceased person’s assets. This process can be lengthy, expensive, and public. A living trust allows you to bypass probate and distribute your assets directly to your chosen beneficiaries.
These testamentary trusts are established as part of a will. This type of trust typically exists when the person who created the testamentary trust dies. The trust document will state who the trust’s beneficiaries are and how the assets in the trust are to be distributed.
An advantage of a Testamentary Trust is that it can help in avoiding probate. Probate is a legal process that can be time-consuming and expensive. When the property is distributed through a Testamentary Trust, the assets do not have to go through probate. It can save time and money for the beneficiaries of the Testamentary Trust.
A Trust Impacts Life and Death
When you establish a trust and die, you will need to have a successor trustee. It will be the only interruption to the trust after you die. Wills are the only way to ensure your assets are shared following your wishes. Wills can also ensure that your loved ones are taken care of following your death.
Assets in your living trust don’t have to go through probate, the legal process of distributing a person’s assets after they die. A living trust is not a will, but it can make dying easier for people who live in states where probate laws are complicated. A living trust can also help you save money on estate taxes.
Major Differences Between a Will and a Trust in California
When it comes to estate planning, there are two primary legal documents that you can use: a Will and a Trust. Both a Trust and a Will have their unique benefits, and it’s essential to understand the significant differences between them before you decide on the right one for you.
Wills are documents that specify how the court should distribute your property after your death. It also names an executor responsible for carrying out your wishes. However, they must go through a process known as probate to be valid. It means that the court will freeze your assets until the court approves the will.
Whereas trust is a legal arrangement in which someone, the Trustee, holds legal title to the property for another person, the Beneficiary. The Trustee can be a person or a legal entity such as a bank or trust company. Trusts do not have to go through probate, which means that your assets can continue to be used and enjoyed by your loved ones even after you die.
Which One Is Better: Wills or Trusts?
A will provides instructions on how to distribute your property after you die. It is an excellent tool, but it has some disadvantages over Trusts. Wills are not flexible, may take longer to prepare, and can be more expensive to probate than a trust.
Additionally, your estate could end up in court if your heirs or creditors contest the terms of the will after you die. A trust does not have that drawback because it takes effect only when you die or become incapacitated.
Living trusts are created while you are still alive. It allows you to keep complete control of your assets and property, avoiding the time and expense of probate. These Trusts offer more privacy than wills because they are not filed with the court. If you have a living trust, you do not need a will.
Wills are generally more straightforward and less expensive to establish. Still, trusts provide more flexibility and may be a better choice if you avoid probate. Both a will and a trust can require you to take on complex legal processes stated in California Law. Talk to an estate planning attorney to determine which option is best for you.
Will And Trust FAQs
Here are the most frequently asked questions about Wills and Trusts in California:
What happens if I die without a will?
If you die without a will, the state will determine how your property is distributed. This can lead to many headaches for your loved ones, so it’s essential to make a will if you want to have any say in what happens to your property after you die.
Usually, the state will give your property to your closest relatives. However, there are a few cases where the state can distribute your property in a way that you wouldn’t have chosen yourself. For example, if you don’t have any close relatives, the state might give your property to charity.
Do I need both Trusts and Wills?
Many people do not realize that there are two types of will: a will and a living trust. Many also don’t know the differences between the two, but both serve essential purposes in estate planning.
A living trust is a vital part of your estate plan because it can eliminate or reduce legal proceedings after death. A will does not have this benefit and should only be used as a secondary document and trust. If you have any questions about wills and trusts, please feel free to consult an estate planning attorney.
Does a will require probate?
A will is a legal document that dictates how your lawyer should distribute your property after you die. If you have a will, it will likely go through probate. However, if you do not have a will, your property will still be distributed by the court according to state law.
Probate is the process of proving that a will is valid and of distributing the estate according to the will’s terms. Not all wills require probate, but most do. There are a few exceptions, such as when the estate is worth less than $150,000.
If probate is required, the executor named in the will must file a petition with the court and then take all the steps involved in the probate process. However, suppose there is no executor named in the will or some other problem with the will that prevents it from being accepted by the court. In that case, another person must be appointed by the court to act as administrator of the estate.
Do Wills override a living trust?
There is much confusion about wills and trusts. People often wonder if a will overrides a living trust. The answer is no – Wills and trusts are two separate legal documents with different functions.
A will is a document that sets out your wishes for what should happen to your property after you die. A living trust is a legal arrangement in which you transfer ownership of your property to a trustee, who holds it for the benefit of yourself and your beneficiaries.
Contact a Probate Lawyer in California for Your Estate Planning Matters
Estate planning is something we all have to face, but you don’t have to face it alone. A probate attorney from the Alden Law firm can give you the legal care you need and help you understand your options to ensure your final wishes are carried out.
Contact us for a free consultation protected by an attorney-client relationship. Our attorneys can help you with the probate process in probate court. You can contact us at (213) 214-6937 or find our office at 611 Wilshire Blvd # 310, Los Angeles, CA 90017.