Can You Have Both A Will And A Living Trust?

Can You Have Both A Will And A Living Trust - Do You Need A Will If You Have A Trust - Difference Between Will And Living Trust - What Is Living Trust vs Will

Can you have both a will and a living trust?

In this article, you’ll learn about: 

  • why you’d want both a will and a living trust
  • what the differences between them are
  • where to put your assets
  • what NOT to put in your living trust
  • what each of them are and how they work
  • how the probate process works for both
  • what to do with property you forgot to put in the trust
  • the average cost of a will and living trust

Keep scrolling to learn more. 

Table of Contents

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Can You Have Both A Will And A Living Trust?

Yes, you can have both a will and a living trust. 

Here is how they work together:

  • Asset Distribution: A living trust distributes specific assets without probate. A will addresses assets outside the trust.
  • Guardianship: A will lets you name guardians for minor children, which a trust doesn’t do.
  • Pour-Over Function: A pour-over will transfers forgotten assets into the trust upon death.
  • Clear Instructions: Both documents together ensure a detailed plan for all assets.
  • Backup Plan: If issues arise with the trust, the will serves as an additional directive.

Do You Need A Will If You Have A Trust?

Yes, you need a will if you have a trust. 

A will and a trust serve different purposes. 

A will directs how assets will be distributed upon your death.

A trust manages and distributes assets according to specified terms. 

Even if you have a trust, a will can address assets not included in that trust. 

Also, a will can nominate guardians for minor children, which a trust cannot do. 

Having both a will and a trust can ensure a comprehensive estate plan.

What Is The Difference Between A Living Trust Vs Will?

Here are the differences between a living trust and a will: 

  • A living trust holds and manages assets for beneficiaries, while a will directs how to distribute assets after death.
  • A living trust avoids probate for assets within it, but a will typically goes through probate.
  • Living trusts are private, but wills become public record.
  • Living trusts can be active during your lifetime, but wills take effect only after death.
  • Living trusts allow asset management during incapacity, while wills don’t offer this feature.
  • Living trusts can’t name guardians for minors, but wills can designate guardians.

Where To Put Your Assets

When you get both a will and a living trust, you have to split up your property. 

This is how you want to split up your different properties.

A will should include things like: 

  • Personal Items: Include jewelry, collectibles, and heirlooms.
  • Small Bank Accounts: Accounts without beneficiary designations.
  • Personal Debts and Liabilities: Specify how they should be settled.
  • Guardian Designation: Name guardians for minor children.
  • Executor Appointment: Choose someone to handle your estate.

While a living trust should include things like: 

  • Real Estate: Homes, land, or other real property.
  • Bank Accounts: Large savings, checking, and brokerage accounts.
  • Business Interests: Shares in a company or partnership interests.
  • Investment Assets: Stocks, bonds, mutual funds.
  • Tangible Assets: Expensive artwork, antiques, or collectibles.

Now, what things should you NOT put into a living trust? 

Read More: If A Property Is In Trust Can It Be Sold?

What Should You Not Put In A Living Trust?

Here is a list of things that you should not be putting into a living trust. 

  • Tangible Personal Items: Don’t include everyday personal items, like clothing. 
  • Incentive Stock Options: These can lose tax advantages if transferred into a trust.
  • Certain Retirement Accounts: 401(k)s, IRAs, and other specific retirement accounts don’t go into a living trust. They have designated beneficiaries.
  • Motor Vehicles: In some states, transferring vehicles to a trust can trigger taxes or complicate insurance.
  • UTMA and UGMA Accounts: You can’t transfer Uniform Transfer to Minors Act and Uniform Gift to Minors Act accounts into a trust.
  • S Corporation Stock: Transferring this can jeopardize the S Corporation status unless the trust is a qualified shareholder.
  • Professional or Personal Licenses: These are non-transferable and can’t be owned by a trust.
  • Timeshares: Check your contract first. Some prohibit transfer to trusts.
  • HSA and MSA Accounts: Health Savings Accounts and Medical Savings Accounts can’t be placed in a trust.
  • Debt: You don’t place liabilities like personal loans in a trust. Only assets.

Here is how you should be handling these items you should not be putting in a living trust:

  • Tangible Personal Items: List in a will or separate memorandum.
  • Incentive Stock Options: Address outside of will/trust, per stock agreement.
  • Retirement Accounts: Designate beneficiaries on the account.
  • Motor Vehicles: Use will or transfer-on-death registration.
  • UTMA and UGMA Accounts: Transfer to minor at the age of majority.
  • S Corporation Stock: Bequeath in the will, ensuring S Corp status.
  • Professional Licenses: Non-transferable; can’t bequeath.
  • Timeshares: Use will or contract’s beneficiary designation.
  • HSA and MSA Accounts: Designate beneficiaries.
  • Debt: Addressed by estate executors using estate assets.

Read More: Can I Put My House In A Trust Without A Lawyer?

What Is Better, A Will Or A Trust?

Determining which is better depends on your goals and situation. 

Let’s look at some key points for wills vs living trusts

This will help you decide which is better for you.

For a will: 

  • A will details asset distribution after death.
  • Wills usually go through probate, which can take time and money.
  • Wills are public records.
  • You can name guardians for children in a will.
  • They’re typically cheaper to create.

 For a living trust: 

  • A living trust holds and manages assets for beneficiaries.
  • Trusts avoid probate, speeding up asset distribution.
  • Trusts remain private.
  • Trusts can manage assets if you’re incapacitated.
  • They’re generally more expensive to set up.

What Is A Living Trust?

A living trust is a legal tool that holds and manages your assets. 

It starts working as soon as you create it. 

Unlike a will, it skips the time-consuming court process after death.

This makes asset distribution faster and private. 

You control the trust while alive, and if something happens to you, a chosen person takes over. 

Trusts can be changeable (revocable) or fixed (irrevocable).

This ensures your belongings go to the right people in the right way.

How A Living Trust Works

In general, here is how a living trust works: 

  • Creation: You create a living trust document, naming yourself as the trustee.
  • Funding: Transfer your assets (like homes, bank accounts, stocks) into the trust.
  • Control: As the trustee, you maintain full control over these assets during your lifetime.
  • Successor Trustee: You name someone to take over (a successor trustee) for when you can’t manage or after death.
  • Asset Distribution: Upon death, the successor trustee distributes assets to beneficiaries based on your instructions.
  • Avoid Probate: Assets in the trust bypass the probate process.
  • Flexibility: While alive, you can change the trust or even dissolve it.
  • Protection: If you become incapacitated, the successor trustee can manage the trust assets for you.

What Is A Will?

A will is a document that says how you want your assets shared after you die. 

You pick someone, the executor, to make sure this happens. 

In a will, you can also choose who looks after any young children. 

It only starts working after you pass away, and you can change it whenever you want while you’re alive. 

Typically, a will must go through a legal process called probate before assets are given out. 

In short, a will tells people what to do with your things and kids after you’re gone.

How Does A Will Work?

Here is how a will works: 

  • Creation: You draft a will, outlining how to distribute your assets after death.
  • Witnesses: Typically, two witnesses sign the will to validate it.
  • Executor: You appoint someone to carry out the will’s instructions, called an executor.
  • Guardianship: In the will, you can designate guardians for minor children.
  • Probate: After death, the will goes through probate, a legal process reviewing its validity.
  • Asset Distribution: The executor distributes assets to beneficiaries as instructed.
  • Debts & Taxes: Before distribution, the executor pays off your debts and any estate taxes using your assets.
  • Finality: Once assets are distributed, the will’s role concludes.

Probate For A Will And Living Trust

Let’s look at how probate works for a will and living trust when used together:

  • Trust Formation: You create a living trust and transfer most assets into it.
  • Will Creation: You draft a “pour-over will” directing any leftover assets outside the trust to flow into it upon death.
  • Death Occurs: Any assets not in the trust are subject to probate.
  • Probate Begins: The pour-over will is submitted to probate court.
  • Transfer to Trust: After probate, those assets are moved into the trust.
  • Successor Trustee Steps In: The successor trustee manages and distributes all trust assets, including those just added, according to trust instructions.
  • Conclusion: Both the probated assets (from the will) and non-probated assets (already in the trust) are distributed from the trust.

Read More: How To Put A House In A Trust

How To Handle Assets You Forgot To Put In The Living Trust

A lot of people have assets they “forget” to put into a trust. 

It could be they ran out of time, forgot, didn’t feel like it, etc. 

To safeguard you from this situation, here is what you should do. 

  • Check Your Will: Ensure your will is a “pour-over” type to transfer missed assets into the trust upon death.
  • Transfer Assets: If you’re alive, move the overlooked assets into the trust.
  • Prepare for Probate: If there’s no pour-over provision, understand the asset might face probate after death.
  • Update Beneficiary Designations: Change beneficiaries to the trust for accounts like life insurance.
  • Keep Records: Document each asset transfer for clarity and future reference.

Let’s say your will is not a pour-over will

You need to create a new pour-over will that directs any omitted assets to be transferred to your living trust upon your death.

Here’s how to tell if your will is a pour-over will: 

  • Locate Your Will: Ensure you have the most recent copy of your will in hand.
  • Read the Provisions: Skim through the document looking for clauses that mention your living trust.
  • Specific Language: A pour-over will typically has language that says something like, “I hereby leave any remaining or forgotten assets to [Name of Your Living Trust].”
  • Check Asset Distribution: See if the will directs the residue or remainder of your estate (assets not specifically mentioned) to the living trust.

Fill out the form on this page to have us fix your will for you. 

Read More: Can You Set Up A Trust Without An Attorney?

Average Cost Of A Will And Living Trust

The average cost of a living trust with a will is $1,750 – $4,500, depending on the complexity of your estate. 

The cost of a will ranges from $750 – $1,500.

For a simple estate, the cost of a will could be around $750.

But the cost of a will for larger, more complicated estates is $1,500+.

Living trusts can vary in cost depending on factors such as complexity and location. 

Basic living trusts can cost around $1,000 to $3,000. 

More complex trusts, like irrevocable trusts or special needs trusts, can range from $3,000 to $10,000+.

Read More: How To Make A Living Trust Without A Lawyer

FAQs About Having Both A Will And A Living Trust

Here are other questions our clients ask us about wills and living trusts. 

Does A Will Override A Trust?

No, a will does not override a trust. 

Assets placed in a trust are governed by the trust’s terms. 

A will only controls assets that are solely in the deceased’s name and not in a trust. 

If there’s a conflict between a trust and a will, the trust usually prevails for those assets it holds. 

To change or override terms in a trust, you’d typically need to amend the trust itself.

Who Needs A Trust Instead Of A Will?

Here is who needs a trust instead of a will:

  • Privacy Seekers: Trusts are private; wills become public records.
  • Probate Avoiders: Trusts can bypass the often time-consuming and costly probate process.
  • Real Estate Owners: If you own out-of-state property, a trust can avoid multiple probate proceedings.
  • Complex Estates: Those with extensive or complicated assets might prefer the structured management of a trust.
  • Specific Timeline Desires: Trusts can set detailed timelines for asset distribution, unlike a will.
  • Incapacity Concerns: If you fear incapacity before death, a trust allows designated management of assets.
  • Blended Families: Trusts can offer precise control in mixed-family situations, ensuring fair asset distribution.

What Are The Disadvantages Of A Living Trust?

Here are some disadvantages of a living trust

And this is why you want to consider a living trust and will combination. 

  • Setup Cost: Establishing a living trust is often more expensive than drafting a simple will.
  • Maintenance Effort: Trusts require ongoing management, including asset transfers and updates.
  • Paperwork: Transferring assets into the trust demands detailed record-keeping.
  • Incomplete Coverage: A trust only governs assets placed in it. Forgotten assets won’t automatically be covered.
  • No Guardian Designation: Trusts can’t specify guardians for minor children; a will is needed for that.
  • Potential Overconfidence: Some may wrongly believe a trust replaces other estate planning tools, leading to gaps.
  • Property Taxes: In some areas, transferring real estate to a trust may impact property tax exemptions.

Get A Will And Living Trust Set Up

If you want help from a trust law firm, fill out the form below. 

At The Hive Law, we understand the importance of:

  • protecting your hard-earned assets 
  • ensuring your family’s future
  • not losing everything to creditors and lawsuits
  • properly (and legally) distributing assets 

We only accommodate a limited number of clients each month.

So don’t miss your opportunity to work with our trust fund lawyers.

Benefits of our trust services:

  • Tailored solutions to fit your unique needs and goals
  • Expert guidance in navigating complex tax and legal matters
  • Preservation of your wealth for future generations
  • Streamlined asset distribution according to your wishes

Avoid the pitfalls of inadequate estate planning strategies:

  • Creditors seizing your assets
  • Lawsuits jeopardizing your family’s financial security
  • Family disputes over inheritance
  • Costly and time-consuming probate processes

Talk soon.

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