By Elizabeth A. Caruso, Esq.
One of the most frequent questions I get from my clients is why do I need a will and a trust; isn’t it just one or the other? This is typically not an opportunity for choice or to pick one over the other. For many people, the best plan uses both. Each document does a job the other can’t. The two documents work as a team and leaving one out can create the very problems you’re trying to avoid.
What a will does
A will is your written instruction to the probate court for what happens to your property after you die. It names a personal representative to settle your affairs and can nominate a guardian for minor children or dependents. The major limitation for a will is the “instruction to the probate court” part, meaning it generally must go through probate, the court-supervised process of settling an estate. Probate can take months, involves court costs, and becomes public record, so anyone can see what you owned and who received it.
What a trust does
A trust holds your assets, such as your home, bank accounts, and investments. A revocable trust allows you to stay in control. You can change or cancel it at any time. When you pass away, the successor trustee you’ve chosen distributes those assets according to your instructions, usually without probate. That often means a faster, more private and less costly process for your family.
A trust also protects you while you’re living. If illness or injury leaves you unable to manage your finances, your successor trustee can step in right away, without your family asking a court to appoint a guardian or conservator.
Why you need both
Here’s the catch: a trust only controls assets that are actually placed into it. It’s common for people to open a new account or inherit property after they have completed their estate plan and never retitle it in the trust’s name. Those assets would be left without instructions.
That’s where a “pour-over will” comes in. This special will works alongside your trust and directs that anything left outside the trust be “poured over” into it at your death. Those stray assets may still pass through probate, but they end up where you intended, under your trust’s terms, instead of being divided according to your state’s default inheritance laws.
Don’t forget the rest of the team
A complete plan usually also includes a durable power of attorney and a health-care proxy. Review the beneficiaries on your retirement accounts and life insurance, too. Those pass directly to the named person, no matter what your will or trust says.
The bottom line
A will and a trust aren’t competitors; they’re partners. Together they keep your affairs private, spare your loved ones delay and expense, and make sure your wishes are carried out. If your documents haven’t been reviewed in a few years, or you’ve had a major life change, now is a good time to sit down with an elder law attorney.
About the Author: Elizabeth A. Caruso, Esq. is an attorney at Legacy Legal Planning, LLC, in Norwell. She has been practicing estate planning, probate, and elder law on the South Shore for more than 15 years. If this article has sparked questions for you, please feel free to reach out via phone 781-971-5900 or email client@legacylegalplanning.com to schedule a time to discuss your unique situation.
