Should I Use a Will, or a Revocable Living Trust Based Estate Plan?
What is the Purpose of Estate Planning?
To pick up from where we left off in Part 1, here is what we are comparing with Wills and Living Trusts.
Part 1 of this Blog covers reasons A and B. Part 2 covers C and D.
Let’s look at these reasons and compare Wills and Revocable Living Trusts
- A. To manage and control your property while you are alive and well.
- B. To provide for ourselves and those who depend on us in the event that we lose capacity
- C. To give what we want to whom we want
- D. To minimize professional fees, costs, court costs, and the like.
C. How is a Will Different than a Revocable Living Trust in How Property is Distributed?
So, with an Estate Plan, there are basically two ways property can be distributed. The distribution can be outright, or in Trust.
An outright gift offers no means of control. Therefore, an outright gift offers no opportunity for potential protection from creditors, predators, divorce, tax, or even from the beneficiary him or herself. A Will only allows for a distribution via an outright gift, or via a Testamentary Trust. A Testamentary Trust is created when the Will “speaks” (upon the death of the Testator) and creates this Trust to distribute the gift. So technically speaking the only way property is distributed purely via a Will is outright, otherwise the distribution is achieved via a Trust.
Most Wills in California must be Probated, which is costly and time consuming. Please see my blog under “Probate” which discusses the process in some detail.
So if some control over the gift is desirable, and costs are to be managed, a Revocable Living Trust is a better estate planning method. Also, please see my Blog for more information on protecting the inheritance of the beneficiary.
D. How are Costs Best Managed – With a Will, or a Revocable Living Trust?
In order to best control professional fees, costs, and other expenses, we need to look at the entire estate, and discuss what is the best method of planning the estate. A Will alone will be less expensive to create than a full Revocable Living Trust plan with ancillary documents, but that does not mean that it is best, or that it will cost less in the long run. Some people think that because a Living Trust needs to be funded, that it costs more than a Will centered Estate Plan with ancillary documents, but this is also not necessarily true. Even with a Will centered plan, titles of various property must still be managed in order to lessen fees and costs.
It is for all of the reasons discussed here and in my other Blogs that the Revocable Living Trust centered Estate Plan is a superior method of planning the estate.
Call me today and let’s start planning! Thanks for reading.
William “Dan” Powell
San Diego, CA
Just like my website, nothing in this blog is intended as legal advice. If you need legal advice, contact an attorney licensed to practice in your jurisdiction. I am licensed to practice law in California. Further, please remember that I speak in generalities in my blog (and on my website). There are so many different factors that can contribute and completely change the outcome that it would not be practical to discuss all of them here. This is why I speak in generalities. Thanks again for reading.