Using Your Will and Living Trust Together
People who create an estate plan in the Colorado Springs or Centennial, Colorado area will almost assuredly include both a last will and testament and a revocable living trust. Both of these estate planning tools will allow you to protect your inheritance choices, but will also give you additional benefits.
Sometimes, people creating a plan wonder if they really need both a living trust and a will. To help explain why you do need to create both of these tools, here are some issues need to be aware of.
Issue 1. The will and the living trust both allow you to make inheritance decisions.
Most people know that a will is something you can use to leave inheritances. You can choose who you want to leave inheritance to, how much those inheritances are, or decide that you don’t want to leave any inheritances at all.
What you might not realize is that you can also make inheritance decisions by creating a revocable living trust. After creating a living trust and transferring your property into the trust’s name, you can use that trust to transfer its property to your heirs after you die.
The main benefit of a revocable living trust over last will and testament is that you can use the trust to distribute property outside of the probate process. If you use a last will and testament to make inheritance choices, the property you choose to leave as an inheritance must first be probated.
Issue 2. A will doesn’t apply while you are incapacitated.
Another benefit of a revocable living trust is that it allows you some protection against the possibility of incapacitation. If you choose to serve as the trustee of your living trust, you maintain the ability to manage the trust’s property. You will also be the trust beneficiary, meaning you have the ability to use and benefit from the property while you manage it.
Should you become incapacitated, you will need someone to step in and manage the trust property in your stead. That’s why you can name a successor trustee who will have this authority.
On the other hand, should you use a last will and testament as your only inheritance tool, you don’t gain the benefits of having a successor trustee who can step in as the manager of the property. A last will and testament only becomes effective after you die. Should you one day become incapacitated, the terms of your will have no effect on who takes control over your property while you are still alive. Should this happen and you don’t have other documents or protections in place, it’s very possible that a court might have to get involved to determine who should manage your affairs.
If you have more questions about how your will and living trust can work together, give us a call at 719-520-1474 or at 303-736-6060, or send us a quick email!