If I Have a Living Trust, Do I Also Need a Will?

11
November

One day, we all will die. Eventually, at some point in our lives, we have to consider what will happen to our assets after we leave this world. The law requires that a person’s estate must be distributed to heirs through legal probate proceedings.

With this in mind, you may have set up a revocable living trust. You may have done everything with the trust properly. You may have kept it funded, and you may have done the proper documentation to determine who will be the trustee that oversees these assets and who will receive those assets as beneficiaries.

Since you have done all this work setting up the living trust, you may wonder whether or not you really need to create a last will and testament. The answer for a multitude of reasons is yes.

First of all, for those who are considering setting up a revocable living trust, having one may be a good idea for many different people.

One group of people that living trusts are likely to benefit are people who do have rather large estates. This is mainly because of the estate tax. For estates that pass a certain threshold, the estate tax will have to be applied. This could be a very large sum of money to fork over to Uncle Sam. With proper estate planning done through a revocable living trust, however, the brunt of this tax can be avoided.

A second group of people who may want to take advantage of trusts are people who do not want to give all their money to their heirs immediately. For example, you may want to set up a trust to pay out to your children at a certain age only. There may be good reasons for this. You may, for example, not want the trust squandered while the children are still relatively young.

A third reason to set up a living trust is to make sure that the money set aside for your heirs is properly invested. Managing money in a trust can be more easily accomplished than trying to properly manage all your assets in general. This is especially the case if you want the investment to grow before your heirs can have access to it.

With all the benefits associated with trusts, you may still be wondering what the point of having a will is. There are plenty of extremely strong reasons for having one.

First of all, the trust will only govern the funds that are deposited into the trust and nothing else. You will certainly have more assets than simply the assets that are in that trust. Your house, for example, will not be part of the trust. You may have some idea of whom you want your home passed onto when you die. Without a will, this will be decided by a court.

Similarly, all your other property such as your car, money in savings accounts, furniture, heirlooms, and other prized possessions will not be accounted for by the trust. Unless you are fine with the possibility of these assets and possessions being passed onto just anyone in your family, you should express your wishes in a last will and testament.

There are also many other things that a last will covers that a living trust will not. For example, you may have dependents such as children who are under your care. Without a will, who becomes the legal guardian for these dependants will be determined by a court. If you don’t wish for your children to be raised by certain family members, you should certainly draft a will to make sure that does not occur.

You may also have specific burial instructions for your body you want to be followed. For example, you may want to be buried in your family plot with your ancestors. Alternatively, you may want to be cremated so your ashes can be spread over a certain location. You need a will to specify how you want to be laid to rest.

Over all, while a living trust may be right for some people and not others, every single person should still take the time to create a last will and testament.

This post was written by

jason – who has written posts on Budget Clowns.
Father of three and married to a lovely women. Always looking for ways to save money, and invest it properly for my children's future.

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