A very common question that we will receive from clients is whether they need a Will and a Trust, do they need a Will in place of Trust, or do they just need a Will? This can be a rather difficult question to answer because this may depend on the unique set of circumstances for each family. When we first sit down with a family or an individual discussing estate planning we will always ask what is most important to you and your family. After we get an understanding on what the family wants, then we can provide a recommendation on which estate planning legal strategy is best for this family given their unique set of circumstances.
However, when a family says that they are concerned about their children and want to make sure that all of their assets pass quickly and easily to their children immediately after death, this is very common a situation where a revocable living trust would be one way to accomplish their estate planning legal objectives.
A revocable living trust is separate legal document and a separate legal entity that will hold ownership of all of your assets during your lifetime. In addition, at your death, your Will is going to direct that your assets will be distributed in accordance with the provisions of the revocable living trust. This is commonly referred to as a pour over Will. Now, this document is a completely separate and distinct legal entity. What I mean by this is that the trust will own and hold of all of your assets, instead of you owning your assets personally. For example, instead of you owning your home and investment accounts as John Smith, you will instead own these assets of John Smith as Trustee of the John Smith Revocable Living Trust. The primary benefit of the trust is that when John Smith dies, since John Smith individually did not own any assets in his name, then there are no assets to go through probate. This way, when John Smith dies, all of John’s children will immediately have access to all of his assets without having to go through the long and drawn out probate court process.
Therefore, for families who have a primary concern of avoiding probate and making the estate settlement process simple for their family, a revocable living trust and a last will and testament would be one way to accomplish their estate legal goals and objectives.