If you have always assumed that you should use a last will as the centerpiece of your estate plan, you may want to take pause. Even if your situation is not extremely complicated, you may find that a living trust is a better choice once you become apprised of all of the facts.
When you establish a living trust, you do not surrender control of the assets. While you are alive and well, you can direct the actions of the trust, because you can act as the trustee. You can also be the beneficiary of the trust at first.
A living trust is revocable, so if you ever change your mind entirely, you can revoke or dissolve the trust and take back direct personal possession of the assets that you conveyed into it.
When you create the trust declaration, you name a trustee to take over the role after you pass away, and you name your heirs as beneficiaries. In this declaration, you can provide instructions that the trustee would be compelled to follow with regard to the exact way that you want the assets to be distributed. This is one advantage that you would not have if you use a last will.
Plus, a will would be admitted to probate after you are gone. This process is time-consuming, and there can also be considerable expenses that accumulate during probate. If you use a living trust, the trustee could distribute assets to the beneficiaries outside of probate.
Now that we have provided an overview, we can look at the specific question that serves as the title of this post. When you create a revocable living trust, you would also want to include a certain type of will called a pour-over will.
This will would allow the trust to capture assets that were in your direct personal possession at the time of your passing. As a result, the assets could be distributed outside of probate along with the rest of the resources that you conveyed into the trust.
If you had a revocable living trust and you did not include a pour-over will, assets that were in your sole and direct personal possession would become probate property. The assets could not be distributed until the estate was closed by the court.
Attend an Upcoming Living Trust Seminar
We have shared some basic information in this brief blog post, but you have a great opportunity to learn all of the facts in person.
During the month of September, we will be holding a number of living trust seminars. The seminars are free to attend, but space is limited, so we ask that you register in advance. To see the complete schedule, click the following link: October Living Trust Seminars.
Mr. Kraft assists clients primarily in the areas of estate planning and administration, Medicaid planning, federal and state taxation, real estate and corporate law, bringing the added perspective of an accounting background to his work.