California Estate Planning: Will vs. Trust – What’s the Difference?

Imagine a sudden illness or accident leaves you unable to make decisions about your finances or medical care. Who would have access to your assets and ensure your wishes are carried out? A well-crafted estate plan is essential to protect your loved ones and your legacy. This article explores the key differences between wills and living trusts to help you choose the best option for your unique circumstances.

What is a Will?

A Will is a straightforward legal document that spells out your wishes for how your assets should be distributed after your passing. It allows you to appoint an executor to carry out these instructions, which includes settling any outstanding debts and distributing your remaining assets to your beneficiaries. Wills are relatively easy and cost-effective to create, but they come with a few downsides:

• Probate:
  Wills must go through probate, a court-supervised process that can be both time-consuming and costly. During probate, the court confirms the validity of your Will and oversees the distribution of your assets according to your wishes.
• No Control During Life:
  A Will only takes effect after you pass away. It doesn’t offer any provisions for managing your assets or handling your affairs if you become incapacitated.

What is a Living Trust?

A Living Trust is a legal document that transfers ownership of your assets to a trust during your lifetime. You, as the grantor, name yourself as the trustee initially, giving you control over the assets. You can also designate a successor trustee to manage the trust in case you become incapacitated or die. Living Trusts offer several advantages over Wills:

• Avoids Probate:
  Assets held in a Living Trust generally avoid probate, saving your heirs time and money.
• Incapacity Management:
  A Living Trust allows you to designate a successor trustee to manage your assets if you become unable to do so yourself.
• Privacy:
  Living Trusts are not public documents, unlike Wills which become part of the probate record.

Will vs. Trust: Which One Do You Need?

Here’s a quick breakdown to help you decide:

• Choose a Will if:
  Your estate is relatively simple, and you don’t have complex asset management needs. You are comfortable with the probate process.
• Choose a Living Trust if:
  You want to avoid probate and ensure a smooth and efficient distribution of your assets. You own complex assets or have minor children. You are concerned about the possibility of incapacity.

Can You Have Both?

Absolutely. In fact, many estate plans include both a Will and a Living Trust. A Will can act as a safety net to cover any assets not included in the Trust, and it’s also the document where you can name a guardian for your minor children.

Consulting an Attorney is Key

Regardless of whether you choose a Will, a Trust, or both, consulting with an experienced California estate planning attorney is crucial. An attorney can help you understand your options, draft the necessary legal documents, and ensure your estate plan meets your specific needs and goals.

In the end, everyone has a different situation, different assets, and different preferences when it comes to what should be done with those assets, both during their lifetime and after their death. If you or a loved one need to create or update their estate plan we encourage you to reach out to an estate planning attorney as soon as possible. The legal team at Naimish & Lewis are here to assist with your estate planning needs.