DO I NEED A WILL OR A TRUST(REVOCABLE LIVING TRUST)?
This is one of the most common questions asked by my clients who are planning their estate. The answer is “yes.” You do need one or the other (unless you want the State of Washington to dictate what happens with your property). A properly planned estate will make sure that your wishes are followed, and will make it much simpler on your beneficiaries.
A Will is a document that directs what you want to happen with your property upon your demise. A Revocable Living Trust is a pool of assets held by a Trustee, who has instructions as to how to distribute the property upon the death of the Trustor(creator of the trust).
Most of the time, a Last Will and Testament is sufficient, and preferred, over a Revocable Living Trust. The best way to simplify the Will v. Trust comparison is to envision each of the documents as a vehicle that will get you to the same place. They accomplish the same end result, but the pathway in getting to the destination is a little different.
In almost all instances, any estate planning objective can be accomplished(placed in the vehicle) in a similar manner, regardless of which option you choose. For instance, both a Will and a Trust can be used to help with estate tax avoidance, appointment of fiduciaries, distributions to minors, and prohibitions against Will contests.
Wills are simpler, less costly, and require little or no maintenance during your lifetime. Trusts, on the other hand are more complex at their inception, more costly, and do require ongoing maintenance throughout your life. For instance, in order for a Trust to accomplish the goal of avoiding probate, all of your assets need to be retitled so that they are owned by the Trust(which means the recording of deeds and execution of titles). As a result, The costs involved in creating a Trust will often be at least double those involved with creating a Will.
However, a Will usually needs to be probated upon death, while there is generally no probate with a Revocable Living Trust. Fortunately, in the state of Washington, the probate process is pretty user-friendly. That being said, a probate does require some work, which involves some time and cost. There is also some post death work with a Trust, but that work is usually less involved than what is entailed with a probate.
What you need is wholly dependent on your particular situation. There are a few instances where the creation of a Trust may be the best option(like if you own property in multiple states). However, for most people, a simple Will is the most logical route.
Deciding Which Is Better: a Trust or a Will
In choosing what is best for your estate—living trust vs. will—it is important to understand the differences between them.
The biggest difference is that a will has no effect on your property while you’re still alive and only takes effect after your death.
A major benefit of the living trust is that it will not have to go through the probate process, as a will must do.
Note, though, that in conjunction with a living trust, you should have a “pour-over will” to catch any assets that have inadvertently been left out. This would ensure that your property doesn’t fall subject to state intestacy laws, which mandate the distribution of assets not covered by a will or trust. The pour-over will does have to go through probate.
As described above, a will offers no privacy as it becomes public record. Your estate may also see cost savings with a trust as opposed to a will.
See also: What to Know About Living Trusts
Ready to Make a Living Trust?
If you’ve decided that you’re ready to create a living trust, you can get started immediately by taking an inventory of your assets, thinking about who you want to inherit what, and also considering carefully who you will choose as your successor trustee.
Setting up a trust doesn’t have to be time-consuming or complicated, especially since now you can find living trust forms online to streamline the process. After answering some simple questions, you’ll be well on your way to incorporating a living trust into your estate plan — and to enjoying better peace of mind about your estate in general.
Don’t yet have a living trust?
Need to make amendments to your living trusts or want to revoke it? Consult an estate planning attorney to advise you as to which option is best for your situation. And, if you don’t already have a living trust, a New Year’s resolution for 2021 should be to create one.
At the Lynx Legal Service, we specialize in creating living trusts as part of a comprehensive estate plan. Call 888-441-2355 or contact us online for a free consultation with our experienced attorney.