Preserve Your Legacy

Estate Planning | Elder Law | Special Needs Planning

DOES MY REVOCABLE LIVING TRUST REPLACE MY WILL?

DOES MY REVOCABLE LIVING TRUST REPLACE MY WILL?

Yes, but no. When you have a fully funded revocable living trust, your final asset distribution is in your trust; and, technically, if you have all of your assets funded and no minor children, you don’t need a will. In this case, your trust is called a “will substitute.”

However, it is prudent to execute a pour-over-will, which is used to distribute any assets intentionally or inadvertently left outside your trust or any assets flowing into your estate at the time of your death, such as the repayment of debts or monies from a car accident or malpractice claim.

In addition, if you have minor children, the will, or the pour-over-will, is used to appoint guardians to raise and care for your minor children if you die.

If you die without a will, any assets not controlled by your trust or by beneficiary designation will be distributed pursuant to state intestacy laws and heirs, not of your choosing, may receive an inheritance.

In addition, if you die without a will and you have minor children, the court will decide who raises your children, not you.

The only beneficiary of your pour-over-will is your revocable living trust. If needed, it picks up any assets not funded into your trust, and pours them into the trust. This is done through the probate process.

It’s generally recommended that you fully fund your trust; this means that all of your assets are either titled in the name of your trust or their beneficiary designation has been changed to the name of your trust.

Because we discuss “trust funding” so often and stress titling all of your assets into the name of your trust, it’s easy assume that your trust owns the assets. In truth, the trustee of your trust owns the assets. While you are alive and well, the trustee is likely you so you maintain full control over your assets.

If you become incapacitated or die, your successor trustees own the trust assets and manage and distribute them for the benefit of your beneficiaries.

While, technically, some folks can go without a will if they have a fully funded revocable living trust and no minor children, it is not recommended. Execute a new pour-over-will anytime you update your trust.

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