Can You Have Both A Will and a Living Trust?

Estate planning for the future of your loved ones is usually not as difficult as many lawyers like to lead you to think. Yes, there are all kinds of probate codes, regulations, laws, etc. And, if you dive into the minutia of these they do get complicated. But, do you have to do the work of a lawyer to figure it out for yourself? The answer is no. For example, a doctor can give you guidance on how to treat an illness in a way that you can make a decision. The doctor doesn’t need to go into every detail of a procedure for you to decide on how to move forward. It’s the same thing with estate planning decisions. Take this question of whether or not a person can have both a Will and a Living Trust. With a little information, the choice is clear, and for many, the answer is actually yes!

A Living Trust Protects Major Assets

Many people choose to create living trust portfolios to pass their estates onto beneficiaries of their choosing. The main reason is if their estate value exceeds their state’s minimum probate requirement, they want to reduce the value of the assets they own to get back under the minimum. When creating a living trust, the person gives away ownership of assets to the living trust. They do retain full control of the assets because the person also owns the living trust.

Let’s use the State of California’s current probateable estate value minimum as an example. In California that minimum is currently $166,250. If a person owns a home with a market value of $500,000 and investments of $125,000 they are significantly over the California minimum and off to probate court. However, with a living trust, the person can grant ownership of the home from themselves individually to that of their living trust. Now again, the person still controls the home through their living trust, but they no longer legally own the home itself. Since they no longer own it, the $500,000 value of the home is not counted in their estate value in terms of probate. In this example that would leave the person with a total of only $125,000 owned in their name, representing the value of their investments. And, just like that, the person’s beneficiaries avoid probate court when passing on their estate since their investments owned in their name are below the aforementioned minimum. A married couple can also create a trust together. They would own the living trust equally, just like owning something jointly in their names such as a bank account, etc.

A Will Protects Assets Not Owned By The Trust

In the above example, the person avoided probate by transferring their home into a living trust, but there is still $125,000 in investments in need of direction. A Will provides that direction. As it is commonly known, a Will states who is selected to receive a person’s assets left as an inheritance. In the case with a living trust, a person draws up a special Will to protect the assets they still own in their name. This Will has a nickname and is known as a Pour-Over-Will. It’s designed to work in conjunction with a living trust. Immediately upon death, the Pour-Over-Will grants all assets still owned in the person’s name individually to the person’s living trust. Once again using our example, the $125,000 in investments are granted to the living trust, and then distributed to the beneficiaries as instructed in the living trust.

Many types of miscellaneous assets can be passed through the use of a Pour-Over-Will. A small checking account can remain in a person’s name for paying bills and depositing paychecks for example. Vehicles, jewelry, clothing can all be passed through a Pour-Over-Will. Even household furnishings are scooped up and granted to the living trust by a Pour-Over-Will. It’s a very handy tool to easily protect the vast amount of miscellaneous items we all own. All that’s required is to make sure the value of these assets remain under the state minimum required for probate. If at some point the value of these miscellaneous assets exceeds that minimum, then the ownership of some assets should be transferred to the living trust to lower the overall value owned by the individual. A married couple that creates a living trust would also each create their own pour-over-will.

You Can Have Both a Will and a Living Trust

It’s actually a pretty simple concept to understand. If a person sets up a living trust to pass on their assets to their beneficiaries, they will also need a pour-over will to work in conjunction with their living trust. The living trust can’t do the entire job itself.

We have an easy-to-follow online presentation that gives a great overview of how a living trust works and explains all the documents contained within a well-equipped living trust portfolio. It also gives a thorough overview of our exclusively simple process that has helped over 17,000 families obtain a living trust at a low flat fee of only $599. And the best part of that price is it also includes the consultation and legal work performed by our very experienced plan attorney law firm. That’s right. This $599 price is not a risky do-it-yourself living trust. Simply click here to watch our free educational video now.