A living trust is sometimes touted as a replacement for a will, but in many cases, this is not accurate. It is true that a living trust and a will can accomplish some of the same objectives as it relates to the distribution of property. It is also true that a living trust has the advantage of not going through probate, thereby helping your beneficiaries receive their inheritance more quickly. Nevertheless, there are still some reasons why it is helpful to have a will even if you have a living trust.
While you can use a living trust to set aside money for your minor children, many states require you to name a guardian for them in your will. If you have a trust but not a will, it falls to the court to appoint a guardian for your children. It is especially important to make out a will to name a guardian if you choose someone that the court would not be likely to appoint, such as a friend of the family who is not a relation.
In theory, everything that you possess can be transferred to a trust before you die and will go to your designated beneficiaries shortly thereafter. In practice, it rarely works out exactly that way. You may not think to transfer everything that you own into the trust, or you may not have time to make the transfer before you die. Therefore, there are likely to be remaining assets not held in trust at the time of your death that will have to be dealt with. These are sometimes referred to as “forgotten assets.”
If there is no will to distribute forgotten assets, the property will go through probate and then be distributed according to the laws of intestate succession.
Many people avoid this with a simple “pour-over” will. This document acts as a safety net. It catches any property that falls through the cracks and sends it to the trust so that your beneficiaries can receive it according to your instructions. This avoids the process of intestate succession. However, it does not usually prevent the forgotten assets from going through probate. Therefore, if avoiding probate is important to you, be sure that you are proactive in retitling assets, changing beneficiary designations, and funding the trust as much as possible.
Your estate plan can be as simple or complex as you need it to be. Contact a wills and trusts lawyer, like a wills and trusts lawyer in Sacramento, CA, to discuss your options with an attorney.
Thanks to Yee Law Group, PC for their insight into some of the reasons you need a will, even if you have a living trust.