In a nutshell, wills are simpler, shorter, and often times less costly. A properly drafted Will allows you to pick the beneficiaries you want to inherit your property at your death. However, a Will still has to run through the Probate system, which can cost time and money.
If you don’t have a Will or a Trust, the government will decide where your money goes based on statutes, and therefore one is well advised to proactively make one’s wishes known. The major difference between a Will and a Living Trust is that while they both allow you to pick your beneficiaries, the Will must still go through California Probate, which as mentioned before, can be quite time intensive and costly.
Having a Living Trust, however, allows one to avoid California Probate and the high, non-negotiable fees and lengthy proceedings. For many clients, it is worth the extra cost of having a Living Trust in order to save one’s beneficiaries time and money associated with the California Probate process. Also, a Living Trust has advantages aside from avoiding Probate, such as creating customized, staggered distributions for young, financially immature beneficiaries, and an additional layer of privacy, as documents that run through Probate are accessible by the public.
That being said, a Will may be the right choice for certain individuals and situations. If one’s estate is small enough to avoid probate (less than $150,000.00), then the Probate process can be completed much more quickly and without the high fees and costs. If you fit within these financial parameters and simply want to make sure that your assets are distributed according to your wishes, a Will might be your answer.
Even if you have a Living Trust, a “Pour Over Will” should be part of your Estate Planning documents. The Pour Over Will is designed to catch any assets that have been unintentionally omitted from the Living Trust. The Pour Over Will then “pours” these assets into the Living Trust at your death so that they are distributed according to the provisions of the Living Trust.
Also, Parents must use a Will to nominate guardians for their children, and they can do this in either a Pour Over Will if they have a Living Trust, or a standard Will if they do not have a Living Trust.
A Will can be amended or revoked by the creator of the Will (Testator), however the right to amend or revoke the Will is conditioned upon the Testator retaining the capacity to do so, and modification or revocation of a Will by an incapacitated Testator is invalid.
At the end of the day, if you’re looking to make life easier on your beneficiaries, and you want to save money in the long run, a Living Trust is likely your answer. If you don’t have many assets, or better said, if you don’t think you’ll have $150,000 of assets at your passing, then a standard Will may be a more favorable option.
If you have any questions or would like any additional information on the benefits of Revocable Living Trusts vs. Wills, feel free to contact Moses Estate Planning for a free consultation, we’d love to help you determine which is the best option for you!