Do I Need Both a Trust and a Will?
If you look around the Internet, you may see several sources that discuss the question, “Should I create a will or a living trust?” In a significant variety of circumstances, the answer is, “Use both.” Whether your estate plan includes a living trust or what’s called a “testamentary trust,” a will is an integral part of your Wisconsin estate plan for many reasons.
Why You Need a Will Even If You Have a Trust
Regardless of what document serves as the primary asset-distribution direction upon your death, everyone should have a will even if you have a trust. Both of these instruments go hand-in-hand to maximize the protections for all your assets.
A Pour-Over Will Covers Anything Not Included in Your Trust
Even if you have a living trust, you still need a will. In estate plans with a living trust, a “pour over” will serves an essential role. Your pour-over will is your estate planning “insurance policy.” Much like how you maintain an insurance policy to assist when something unexpected happens to your home or vehicle, even though it is possible you may never need it, your pour-over will steps in to help by directing any assets that you did not transfer into your living trust.
You may never need your pour-over will, if you place all your assets into your living trust or accounts with death beneficiary designations, but the pour-over will operates as a vital “back-up” to your living trust.
A Will Can Do Certain Things a Trust Cannot
There are several important things that a will can do that a trust cannot. For example, a Will allows you to name a guardian to care for your minor children, which is something that a trust does not provide. If you do not designate a guardian, the courts will do so for you.
With a Will, you will also be able to name an executor to handle the affairs of your estate when you pass away, such as paying off debts and bills.
How Does a Pour-Over Will Work?
Chances are, if you have a living trust, the asset-distribution plan you laid out in that document constitutes an accurate and current representation of your estate planning objectives. The concept of the pour-over recognizes this and, rather than creating another set of distribution instructions, or duplicating the instructions from your living trust, the pour-over will simply directs that all assets under its control go to your living trust. These assets do not avoid probate, but the pour-over will does ensure they become part of your trust’s assets, where the carefully laid-out instructions you spelled out there can control.
What is a Will with a Testamentary Trust?
Some estate plans use a trust that is created in a will; that trust is not a living trust and the will is not a pour-over will. This is a testamentary trust. These types of trusts do not avoid probate and are matters of public record because they are part of your will, but they may still serve an important need. Often, people use testamentary trusts as a way to provide financially for their minor or relatively young children.
In the case of famed singer Whitney Houston, she left her wealth, of approximately $20 million, to her daughter, Bobbi Kristina. The singer’s will, however, did not distribute the huge estate directly to the 19-year-old daughter. Instead, Houston’s will placed the assets in a testamentary trust, directing her daughter to receive payouts upon her 21st, 25th, and 30th birthdays.
Discuss Your Estate Plan with Experienced Attorneys
Whether you have minor children, desire to avoid probate, or have other specific estate planning goals you wish to accomplish, the assistance of an experienced estate planning attorney can provide immense value to ensure your plan functions the way you want.
Estate Law Partners, LLC has years of experience with all manner of trusts and wills, and the dedication to ensure clients’ plans reflect their planning desires.
Contact us through our website to schedule your confidential initial consultation.