That’s a common question for those navigating estate planning, and the answer isn’t a simple yes or no – it’s nuanced and depends heavily on how the trust and will are structured and what assets they cover.
What Happens When a Trust and Will Conflict?
Generally, a properly funded trust *does* take precedence over a will, but not automatically. A trust is a legal entity created during a person’s lifetime to hold assets for the benefit of designated beneficiaries. A will, conversely, is a document that dictates how assets are distributed *after* death. If assets are titled in the name of the trust, they are governed by the trust’s terms, *not* the will. Approximately 55% of Americans currently have a will, but only 30-40% have a trust, creating a significant gap in comprehensive estate planning. This means a sizable portion of estates still rely solely on wills, leaving them potentially vulnerable to probate and its associated costs – often 5-7% of the estate’s value.
Can I Change a Trust After It’s Created?
Many people mistakenly believe a trust is set in stone, but most revocable living trusts allow for amendments and modifications during the grantor’s lifetime. Think of it like a blueprint for your estate, that can be revised as life changes occur – a new child, a significant asset acquisition, or a change in beneficiaries. However, it’s crucial to make these changes formally, with updated trust documents signed and witnessed correctly. I once worked with a client, Martha, who created a trust 20 years prior, naming her two children equally. Years later, her daughter became financially unstable due to unforeseen medical expenses. Martha wanted to adjust the trust to provide more support for her daughter, but she hadn’t formally amended the document. Without the proper amendments, the trust continued to distribute assets equally, leaving her daughter struggling and creating family tension.
What is Probate and How Does a Trust Avoid It?
Probate is the legal process of validating a will and distributing assets through the court system. It can be time-consuming, expensive, and public. A trust, particularly a revocable living trust, allows assets to pass directly to beneficiaries without going through probate. This is because the trust technically *owns* the assets, not the individual. In California, probate fees are calculated based on the gross value of the estate, potentially costing significant amounts. A $1 million estate could face probate fees exceeding $40,000. By transferring assets into a trust, you bypass this process, saving time, money, and maintaining privacy.
How Can I Ensure My Trust and Will Work Together?
A well-coordinated estate plan includes both a trust and a ‘pour-over will.’ The pour-over will acts as a safety net, directing any assets *not* already held in the trust to be transferred into the trust upon death. This ensures all assets are ultimately governed by the trust’s terms. I remember a client, Robert, who meticulously funded his trust but forgot to update his retirement account beneficiary designation. Upon his passing, the retirement funds bypassed the trust and went directly to his niece, contradicting his estate plan intentions. Luckily, with careful legal work and a few adjustments, we were able to steer those funds in the correct direction. Proper coordination and regular review are key to a successful estate plan. It’s vital to consult with an experienced estate planning attorney to tailor a plan that meets your specific needs and goals.
“Estate planning is not about dying, it’s about living—living well, living comfortably, and ensuring your loved ones are taken care of.”
Who Is Ted Cook at Point Loma Estate Planning Law, APC.:
Point Loma Estate Planning Law, APC.2305 Historic Decatur Rd Suite 100, San Diego CA. 92106
(619) 550-7437
Map To Point Loma Estate Planning Law, APC, a living trust lawyer: https://maps.app.goo.gl/JiHkjNg9VFGA44tf9
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About Point Loma Estate Planning:
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