A will is a legal document in which a person designates an executor to administer the estate, names a guardian for minor children, and specifies how assets are to be distributed after death. Nothing in your will is activated until you pass away. A trust, on the other hand, is a fiduciary arrangement that functions as a sort of holder for assets. A trust can be created and function while you are living, or it can be created but not take effect until you die. There are a lot of different kinds of trusts with different features and requirements.
If I Have a Trust, Do I Still Need a Will?
While it is tempting to think that having a trust might make a will unnecessary, there are a few reasons that you still need a will, even if you have a trust.
- A trust cannot name a guardian for minor children.If you have children under the age of majority (18 in some states, 21 in others), you will most likely want to choose a trusted friend or family member to take care of them if both you and their other parent are incapacitated or deceased. Naming a guardian is one of the most important functions of a will for parents. If you neglect to do this, the court will appoint a guardian for your children, should they need one.
- A trust only covers the assets it contains. It is very rare for anyone to transfer every single asset they own into a trust. Even if this is your intention, it is possible that something will be missed or that you acquired something shortly before your death and do not have time to make the transfer. A will covers any assets that are not contained in the trust.
- A trust cannot cancel debts owed to you. If there are any debts owed to you that you wish to cancel at the time of your death, you must do so in a will. A trust cannot do that.
If I Have a Will, Do I Still Need a Trust?
Just as there are certain things a will can do that a trust cannot, there are things a trust can do that a will cannot. A trust can protect your assets from going through probate court, saving your family time and money, for example. Certain kinds of trusts can be set up to allow a disabled child or family member to benefit from an inheritance without it making them ineligible for benefits they are receiving, and a trust with a spendthrift clause can keep an heir from squandering their inheritance. A will can do none of these things. Trusts may have tax benefits in certain specific cases, as well. Consult one of our skilled and experienced estate planning attorneys to learn more.
Why Choose Dudeck Law Firm?
At Dudeck Law Firm, we are dedicated to the practice of estate planning and elder law. By focusing on these areas, our attorneys gain experience and knowledge that we can use to help you set up the best plan for your and your family’s future. Call us today to get started.