QUESTION: Should I have a will or a living trust?
ANSWER BY RICK COURTNEY:
We hear the question all the time, which should I have a will or a living trust? And it depends. It depends on each person's goals for their estate planning. A will is written instructions about who will get your assets at your death and how they will get them. And a will can contain a trust that would be set up after your death.
So if I have a spouse or a child that I want to leave some assets to I can do that in a will. And if I have the need to leave those assets in a trust to take care of that spouse or child I can name the trustee and put that in my will. However a will has to go through the probate process in court to be effectively initiated and for those trusts and those asset distributions to take place, and my creditors would have a chance to get paid out of my estate through the probate process.
The living trust, on the other hand, is a trust that I would set up now. I would put my assets into that trust. And when we help clients with living trusts we help do the deeds to deed a home or other real property into the name of the trust. And we also put up financial accounts into the name of the trust.
So Courtney could set up the Courtney revocable living trust and I can deed my house to Rick Courtney, trustee of that trust where I still own it as trustee. I manage those assets, but they are in my trust.
At my death the living trust assets do not go through a court process. The successor trustee that I name, that is, a child or someone coming along behind me would pick the trust up and take over and distribute those assets to the people and in the way that I would want them to be distributed after my death. And at that point it acts like a will.
So the living trust benefits are a trustee would always be in place to manage those assets if I become incapacitated and they won't go through a probate process at my death. The will is simpler, and for those people who, say, well, a probate process is not a big deal to me that may be a choice that they would choose.