Do I Need a Will or a Trust or Both in California?

Every Californian should have estate planning documents in place. The question you may be asking yourself is, “Do I need a will or a trust or both in California?” The answer is more complicated than you might assume.

Hire a Wills Lawyer

Whether you decide to draft a will, establish a trust, or both, you’ll need to hire a wills lawyer. As of 2021, only 46% of Americans had a will in place. 45% of people also did not have a living will, either. Just 20% of individuals under 30 had a will. It doesn’t matter why you’ve decided to create a will, though. You should hire a will and trust attorney to help with drafting the necessary documents.

A will and trust attorney can make sure your estate plan covers everything it needs to, whether that means leaving a single piece of property to one heir or dividing up a complex estate among many trust beneficiaries. It may cost some money to hire a wills lawyer, but the decision will pay off in the long term.

Differences Between Wills and Trusts

When you draft a will, it establishes how your assets and debts should be distributed following your death. A living trust takes effect while you are still alive. You can name a trustee to manage the assets indefinitely, while the executor of a will only manages assets until after the probate process is complete.

Trusts allow information about your estate to stay private since they avoid the probate process. When you go to probate court in the Golden State, the information about your estate is made public. Since your trust will not go through probate, your estate won’t have to pay court fees or a probate attorney when you die, leaving more money to your beneficiaries.

Why You Should Have a Will in California

If you pass away without a will, it’s known as dying intestate. In these cases, the California probate courts must decide how to distribute property and how your dependents should be cared for. The probate process can cost up to 10% of the estate, and it can drag on for months to years. Having a will in place means you get to decide how your assets are divided, and it also allows your estate to bypass some of the probate process. Your will can:

• Dictate how your property gets distributed.
• Determine who cares for your children.
• Assign a trusted person to manage the property left to minor children.
• Name an executor you trust to carry out the terms of your will.
• Reduce the chances of infighting among your relatives following your death.

Even if you plan to establish a living trust, you should have a will in place. A living trust can let you exert more control over how your financial assets are distributed, but it won’t provide guidance for who should care for your children. Furthermore, some assets are better covered by a will than a trust.

Who Needs a Trust in California?

Living trusts are so named because they are established during your lifetime. You can still access and use the assets in a living trust, but this arrangement allows them to be transferred to your beneficiaries without going through the probate process. There are many additional advantages to having a living trust in California. They include:

• Increased control over how assets are distributed
• Lower estate taxes
• Maintenance of privacy
• Planning for incapacity
• Flexible distribution terms
• Protection for special needs beneficiaries
• Greater protection against challenges

As you can see, the benefits of having a living trust in place are many. The only real drawback is that it is more expensive to create and maintain a trust. If you have a large or complex estate, it’s worth the money, and this arrangement should form an integral part of your estate plan.

FAQs

Who Needs a Trust Instead of a Will in California?

Several categories of people may need a trust instead of a will in California. The first includes those who want to avoid the lengthy probate process. The second is anyone who wants to maintain privacy, since wills are public records. Anyone who possesses a large or complex estate is also better off establishing a trust instead of (or in addition to) a will.

Is It Necessary to Have Both a Will and a Trust?

It is often useful to have both a will and a trust, and it’s a recommended approach for comprehensive estate planning. Creating both allows the trust to handle assets during your lifetime and avoid probate, while your will should ensure that any missed assets are transferred to the trust. The will should also assign guardianship for minor children.

What Is the Difference Between a Will and a Trust?

The difference between a will and a trust is that a will defines how assets are distributed and guardians are appointed following your death, and it must go through probate. Conversely, a trust takes effect during your life. A trust can also bypass probate and offer a greater level of control over your assets, both during your life and after your death.

What Shouldn’t Be Put in a Trust?

Qualified retirement accounts and health savings accounts shouldn’t be put in a trust. Doing so can trigger taxes and penalties. Most professionals also recommend not putting these assets in a trust:

• Vehicles
• Life insurance policies
• Active bank accounts
• Some annuities

There are better estate planning tools to handle these assets, which can prevent unnecessary complications.

Your California Will and Trust Attorney

Whether you need a will, a trust, or both in California depends on your exact circumstances. The next step is to find a California will attorney who can carefully draft your documents and explain your options. Meinzer Law Firm, PC, can provide these services, along with detailed and knowledgeable guidance on your estate plan. We have been practicing estate law for over 20 years; in that time, we’ve developed an intimate understanding of will and trust laws. Contact us to schedule an initial consultation today.