When you have a living trust do you need a will?
When you have a living trust do you need a will? What is the difference between a will and a revocable living trust? If I have a revocable living trust, do I also need a will?
Living trusts and wills function almost the same during life. The difference is that when you die, the title to the property in your trust will pass automatically to those you named to take it; wills must generally go through a court's probate process.
Still, it's a good idea to have a will, even a simple one, as a catch-all for property that, for one reason or another, doesn't make it into your living trust.
A will is an essential back-up device for property that you don't transfer to yourself as trustee of your living trust. For example, if you acquire property shortly before you die, you may not think to transfer ownership of it to the trust -- which means that it won't pass according to the trust terms. But in a back-up will, you could include a clause that names someone to get any property that you haven't left to a particular person or entity.
If you don't have a will, any property that isn't transferred by your living trust or other probate-avoidance device, such as joint tenancy, will go to your relatives in a hierarchy set out in your state law. These laws may not distribute property in the way you would have chosen.
A Living Trust should automatically contain a Pour Over Will ~ at least that is how I draft mine for my clients to avoid any potential liabilty for a significant asset passing via intestacy and not under the terms of the Trust.
I agree… Good estate planning is critical, if one has assets that merit all the trouble… And yes I agree, we all should have a will. Even if we, or our parents, have a small estate, we might want to create a will just to make sure that our money and property are distributed according to our, or our parent’s, true wishes. And not the wishes of local laws, or a probate court judge. You never know.
I agree with this article… I think we should set the stage and exert control, even after death, for how our assets will be distributed after death. Even if the estate is modest. Whatever it is… real estate, stocks, bonds, or other investment accounts such as savings bonds or mutual funds, or whatever… Personal property; retirement accounts; cash bank accounts.
But as for trusts, discussed in great detail here in this article… I say why get into all the expenses and trouble and complexities of maintaining a trust, beginning with a pricey trust attorney, plus the expense of a trustee after we die, and even lawyers that may be involved after death and must be paid as well… Unless we really, really want to minimize or completely avoid the lengthy probate process, especially if we’re inheriting out-of-state real estate, land or a house, or several homes.
Or maybe if we’re obsessed with the prospect of paying too much tax. But realistically, as for the federal estate and gift-tax exemption of $5.43 million or whatever it is now – honestly, how many of us have that much to leave, or are inheriting that much from wealthy parents? Not many. How many people do you know that have that kind of money? Not many. Few of us have that much to leave to our heirs, or are expecting that much as an inheritance. That’s the way it is.
And anyway, if we're wealthy and do have those sorts of assets, we can afford to pay for complex pricey trusts and lawyers and trustees… Middle class heirs opt for trusts, and usually seem to opt for a simple will and estate set up, often going through the probate process if it’s necessary. So big deal. It’s not that bad, and it’s not that expensive. Of course with trust lawyers, probate is an ugly word.
But as an heir, looking at this from the other perspective, as the receiver not the giver, if we’re expecting a modest inheritance and find that we’re needing some fast probate cash during probate, we can usually get immediate inheritance money with a loan on our inheritance by borrowing against inheritance. Sometimes it comes in handy.
If we have our inheritance in trust, and are waiting for ever, frequently years, for distribution… we will often come up against a Spendthrift Clause, or Spendthrift Provision, which usually prevents us from borrowing against our inheritance in trust. Whereas, if our inheritance is in an estate in probate, we generally can get a loan on inheritance… borrow money against our inheritance. It sure helps if we’re broke at that point, believe me. So those of us creating a will or trust for our heirs or beneficiaries… might think about that. We might think long and hard about it.
I think, as middle class heirs, when we get to that point in life where we’re actually waiting for an inheritance to distribute… it dawns on us rather quickly that our inheritance isn’t going to be that fabulous 7-figure step towards early retirement that we thought it would be, when we were 35. If you want to know the truth…
I see many heirs, with lousy cash flow let’s say, that really need immediate cash, and are feeling broke and somewhat disappointed and depressed about their inheritance and their life in general – will frequently begin researching probate advance and inheritance cash advance or inheritance loan companies… for estate loans or estate advances right away, inheritance loans, large or small inheritance advances or inheritance advance loans, probate loans, or probate real estate loans — and just to be safe will submit inheritance cash advance, probate loan, or probate cash advance applications to more than one online probate loan, trust fund cash advance or inheritance loan company that deals with loans on inheritance, inheritance loan advances, probate cash advance funds, inheritance loans in advance, and loans against inheritance, from established probate cash, inheritance loan companies like www.heiradvance.com, or www.inheritancenow.com or probate cash companies like www.inheritanceadvance.com. Established probate loans specialists that provide similar inheritance loan advance services, for probate heirs and trust fund beneficiaries. But no matter how hard our parents tried to make sure their estate planning was perfect for us, their heirs… a lot of cash gets used up these days, and what we get, what’s left, may not be as much as they had hoped to leave us. Or that we hoped to receive. Our parents, or we, can try to do everything right – but reality enters in and things can change… whether or not these wonderful estate-planning golden rules are followed or not. So if some fast probate cash can enter the picture and lighten up the mood, and give heirs the ability to live high on the hog for a little awhile… hey, why not.
It beats sitting around depressed about what other people are inheriting, or about what we’re not inheriting! Might as well spend some money and live a little, and maybe turn around our own luck with the right attitude, in the right direction, increasing our positive attitude as well as our income! Why not.
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