Both a revocable living trust and a last will and testament are important pieces of every estate plan. Though estate plans also include other tools, living trusts and wills are essential because they both cover different areas. When people in California create an estate plan, they sometimes ask if they can only create one or the other. While you are never obligated to create any kind of estate planning tool, choosing to create either a living trust or a last will and testament without creating the other is a bad idea. Here is why.
Your Last Will and Testament
The simplest last will and testament is one in which you state your inheritance choices. You’ll also state who you want to serve as the executor of your estate. An executor is the person responsible for managing all your property after you die. Executors have to manage estate property throughout the legal process that is designed to identify who the new owners of the deceased person’s property should be. This process is known as probate.
Every state has its own set of probate laws, but they all allow a person to name who the executor of their estate will be by creating a valid last will and testament. If you fail to create a will, or make a will that doesn’t meet state legal requirements, a court will determine who will manage your estate, not you.
Wills are also important if you have young children. If you should die before you young children are adults, someone will need to take over the responsibility of caring for them. This person, called guardian, is also someone you can nominate through your last will and testament. Like an executor, if you fail to nominate a guardian the court will appoint someone on its own.
Your Revocable Living Trust
A living trust is designed to allow you to avoid the probate process that would otherwise apply to any personal property you leave behind. When you create a living trust, you create an entity that can own your property. This entity will survive you after your death. Because of this you can direct the trust to distribute your property to others after you die without the necessity of going through probate.
Through living trust you can nominate a trustee who will manage the property after you die or become incapacitated. Because of the possibility that you might be incapacitated, the trustee you nominate will be able to step in and manage the property should you lose your ability to make choices.
However, while the living trust can allow you to avoid probate, you cannot use it to nominate a guardian or executor. For this, you need a will.
Estate planning is complex and rarely suitable for a do-it-yourself effort. The best way to start is to work with an experienced and qualified estate planning attorney.