Should You Have A Will Or A Trust? – This is a question that many people are asking themselves.
In our law blog post, we began a discussion comparing wills and trusts, two legal instruments that are available to people conducting their estate planning. Our previous post focused on wills. In this post, we will discuss trusts and how they differ from wills in California.
As opposed to a will, which takes effect after death, a trust can begin while you are still alive. In a living trust, a settlor, or the person creating the trust, puts certain property “in trust” of a trustee, or person who agrees to take care of the property. Those who will benefit from the property are called beneficiaries.
The settlor can act as trustee and even as beneficiary of a trust, though for purposes of estate planning, third parties generally will be named as trustee and beneficiary in the event of the settlor’s death or disability. Assets included in the trust are under the control of the trustee, who operates under the terms of the trust of manage those assets and distribute them to beneficiaries.
Under California law, trusts do not go through probate. However, you may still need a will for property that is not included in the trust. Also, for those whose estate is worth under $150,000, a will may be the best course of action because probate would not be necessary.
Each person’s estate and wishes are unique, so a consultation with an estate planning attorney may be a good idea to help decide which instrument is best for you.
Source: Lake County News, “Estate Planning: What is the difference between a trust and a will?” Dennis Fordham, March 30, 2013