Many individuals and families have a Revocable Living Trust in addition to the Will. Revocable Living Trusts are an estate planning tool that you can use to determine who will get your property when you die. They are called ‘Revocable’ because you are able to change the trust as your wishes or circumstances change, and ‘Living’ because you make the trusts during your lifetime. Some people may wish to have an Irrevocable Living Trust instead, which is a trust that cannot be changed once it is made. By transferring assets into a trust, you can provide for continued management of your financial affairs if you are incapacitated or upon your death. Assets held in a revocable trust avoid probate.
Once the trust is established, you will go through the process of ‘funding.’ The term ‘funding’ refers to the transfer of your assets and property into the trust. Any property or assets that you wish to be held by the trust need to be re-titled in the name of the trust. A trust is like a bucket which is meant to hold all of your assets. If you do not ‘fund’ the trust by re-titling your assets, the trust itself is useless.
Why Do I Need a Trust if I Have a Will?
With both a will and a trust, you are able to name beneficiaries for your assets, leave property to young children, and revise your document as circumstances change. However, a trust will ensure that your assets and your will avoid probate, reduce the chance of court disputes over your property, and keep your will and the details about what assets are passed to whom private.
Why Do I Need a Will if I Have a Trust?
A trust is not a ‘better’ or ‘upgraded’ will. Although a trust is important, it does not replace a will. With a will, you can name guardians for children, name someone to manage your children’s property or inheritance, name an executor, and give instructions on how debts and/or taxes are to be paid.
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