People often think of wills and trusts as an either/or question. This is true only to a certain extent. We will look at some reasons why you need a will even if you have a trust. Before we get there, let’s look at the benefits of a living trust.
Streamlined Estate Administration
You should consider the tasks of the administrator when you are planning your estate. The administrator of a trust is a “trustee”; the administrator of a will is an “executor”.
Assets transferred to a living trust are typically listed on a schedule. This consolidation of ownership usually makes the trustee’s job easier. An executor administering a will must locate and identify the assets that comprise the estate.
A will must be admitted to probate, which is a legal process that takes place under the supervision of a court. Depending on the jurisdiction, probate usually takes 10 to 24 months for the process to run its course. Assets are distributed only after probate is completed and closed by the court, so the heirs must play a waiting game.
Cost is another negative. Probate expenses typically consume between 3% and 7% of the estate before heirs receive their inheritance.
Also note that probate records are public. Most people value their privacy with regard to their assets, so this is often another drawback.
A properly funded living trust will avoid probate, and the negative impacts discussed above.
Ongoing Control and Flexibility
Under a living trust, you act as the trustee while you are living, and have direct access to all of the assets. You should name a successor trustee to handle the assets upon your disability or death, and the beneficiaries to whom you want your trust assets distributed.
You can change the beneficiary and trustee designations at any time, and you can convey additional assets into the trust after it is established. Finally, you may revise your trust at any time, providing total flexibility.
Asset Protection After Your Passing
A revocable living trust can provide asset protection for your beneficiaries. For example, you may limit beneficiaries’ direct access to principal, which will protect the assets from creditors.
To prolong the viability of the trust, you may instruct the trustee to provide limited distributions on an incremental basis over an extended period of time.
Pour-Over Will and Guardian Designation
As to the matter of wills, a pour-over will should accompany a living trust. A pour-over will ensures that any assets still owned by you individually at your death are transferred to the living trust. In addition, you can only appoint a guardian of minor children in a will.
A living will is an advance directive for health care, and an important consideration in any estate plan. A living will allows you to state your preferences with regard to artificial life support.
Schedule a Consultation!
Today is the day for action if you do not have an estate plan. You can schedule an appointment with one of our attorneys in Oklahoma City by calling 405-843-6100. Our Overland Park, Kansas attorneys can be reached by calling 913-385-9400. Finally, you can fill out our contact form if you would like to send us a message.