“Why Do I Need a Trust if I Have a Will?”
First, let’s cover the basics:
What is a Will?
A Will is a document that is intended to be submitted to probate court, and provides a list of instructions that include (but are not limited to):
Who should be named as your executor (a/k/a Personal Representative) in charge of administering your estate
How should your estate be divided and distributed - meaning how should expenses be paid, which beneficiaries get what, and the conditions and contingencies on those distributions (e.g., if my spouse predeceases me, then my children split things equally, and so on)
Powers and restrictions placed on executor / personal representative (e.g., power to sell real estate)
Naming a guardian for your minor children, if applicable.
But there’s a big problem with the Will - it goes through probate court.
The thought that a Will does not avoid probate is probably the most common misconception in the world of estate planning. If you want to keep your property out of probate court, then you should have a living trust.
So what’s a living trust?
Living trusts are agreements created while you are alive (as opposed to testamentary trusts, which come into effect upon your death).
There are two broad categories of living trusts:
Revocable living trust
Irrevocable living trusts
REvocable living trusts are ones that you generally maintain full control over and can change at any time. The basic idea is this: you create a trust, you name yourself as trustee (manager) of the trust, and you name yourself as the lifetime beneficiary of the trust and then provide a list of remainder beneficiaries (the people who will inherit the property held in trust after you are gone).
IRRevocable living trusts are generally much more specialized trusts that are designed for a specific purpose (e.g., to protect your home if you need to go to a nursing home), and for that reason, have much stricter controls. Generally, when you create an irrevocable living trust, you are not in direct control of the trust, but may still retain certain rights/benefits over the trust in order to meet your specific objective.
So what should I do? Do I need a living trust?
Yes, virtually every one of my clients gets a living trust - the only exception is for clients who don’t own real estate. However, for my younger clients, if you don’t own real estate yet, but have minor children, then you should still have a living trust because minors should not be named as direct beneficiaries.
For everyone else, the living trust gives you two major benefits that a Will does not:
Keeps your property out of probate
Protects your children’s inheritance
So, if you want to make things easy for your family and protect your assets, then you should have a living trust.
If you found this video on estate planning informative and helpful, don’t forget to explore more valuable content on my YouTube channel. Click here to access more insightful videos dedicated to estate planning. Whether you’re looking for tips on Wills, Trusts or inheritance strategies, Perennial Estate Planning is your go-to resource for all things related to protecting your family’s future.
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Need help with your Estate Planning?
If you would like to review or update your estate plan, then give me a call at 781 202 6368 (MA),
603 836 4166 (NH),
email jlento@perennialtrust.com, or click here to schedule your free personal consultation.
I’m always happy to help!
Joseph M. Lento, J.D.
Your Local Estate Planning Attorney
www.PerennialEstatePlanning.com
Massachusetts Office:
477 Main Street
Stoneham, MA 02180
New Hampshire Office:
91 Middle Street
Manchester, NH 03101
