How to Choose Between a Will and a Living Trust: Key Differences and Benefits

Estate planning in California often involves two cornerstone documents: a will and a living trust. Deciding which one is best for your situation can feel overwhelming, especially when each has unique features, benefits, and potential drawbacks.

Working with a legal professional can save your heirs from court fees and family disputes, and it also lets you spell out who’ll receive your assets once you’re gone.

The Law Offices Of Gary R. Kershner helps individuals choose the best path to protect assets, provide for loved ones, and create a clear legacy. I prioritize taking a thoughtful approach for clients going through the estate planning process in Oakland, California, and beyond.

Learn More About Wills

A will is a legal instrument that specifies how you want your property distributed after your death. It can also name guardians for minor children, making sure that they receive proper care if something happens to you unexpectedly. Wills must adhere to California rules for them to be considered valid.

A few basic points about wills include:

• They only go into effect upon your death.

• They typically have to pass through probate, a court-supervised process that validates the will.

• You can name an executor to manage the estate’s debts, taxes, and distributions.

Because wills must go through probate, your property distribution might become part of the public record. That aspect sometimes makes people consider other estate planning choices. Still, for many people, a will is a straightforward way to leave instructions about who receives personal belongings, real estate, or financial accounts.

Features of Living Trusts

A living trust (often called a revocable trust) is a legal arrangement you create during your lifetime. It holds title to your assets while you maintain control as the trustee. When you pass away or become incapacitated, a successor trustee steps in to manage or distribute those assets according to your instructions, typically without court involvement.

Here are some core features of living trusts:

• Flexibility: You can amend or revoke the trust whenever you’d like

• Probate avoidance: Property in the trust bypasses probate in most cases

• Privacy: Trust terms aren’t usually subject to public record, unlike wills

By avoiding probate, a living trust often transfers assets more quickly and keeps financial matters private. Some people assume living trusts are only for individuals with large estates, but that’s not always true. Even if your estate is modest, a trust can save your family time and court costs later.

Common Misconceptions About Living Trusts

• They’re only for the wealthy: Not necessarily—anyone seeking to sidestep probate might benefit

• You lose control: You remain in charge as the initial trustee and can change the trust at will

• They’re difficult to maintain: Proper setup is key, but everyday management can be relatively simple

If you acquire new assets after establishing your living trust, it’s wise to transfer them into the trust right away. Forgetting to update the trust might mean some assets still go through probate.

Differences in Probate

One major contrast between a will and a living trust is the impact of probate. A will usually requires probate, meaning the court oversees the will’s administration. This process can be time-consuming, especially if relatives dispute its validity or if beneficiaries live in different states. Probate can also generate fees that eat into your estate’s value.

A living trust can bypass probate because the trust itself owns your assets, not you as an individual. Upon your death, those assets remain under the trust’s ownership, which your successor trustee can manage and distribute. This arrangement often means heirs receive their inheritances more quickly, without waiting on the court. 

Maintaining Control During Life

Some people worry about relinquishing control over their assets if they place them into a living trust. Because the trust is revocable, you can revise its terms or even dissolve it entirely. If you serve as the initial trustee, you still manage your money and property in the same ways you did before. There’s no separate tax filing requirement for a revocable living trust.

With a will, you keep complete ownership of your assets in your own name until your passing. That means any significant changes to your plans, such as adding beneficiaries or altering distributions, are achieved by updating your will. Regardless of which document you choose, estate planning in California is about making sure your wishes are honored. 

Privacy and Efficiency

The probate process for a will becomes part of the public record, which can open your finances and bequests to outside scrutiny. That might not bother you, but it could bother your heirs who value privacy.

A living trust largely keeps your business out of public view. The successor trustee distributes assets privately, according to the trust’s terms. This can simplify matters in various ways:

• No need for court filings: Typically, trust documents don’t get filed in public records

• Quicker timeline: Families often see faster distribution of assets

• Lower fees: Court costs tied to probate are often avoided

If you’re worried about loved ones dealing with drawn-out probate proceedings or public exposure, a trust might make sense. Some individuals opt for a trust specifically to lessen stress and expedite asset transfers for their beneficiaries.

Avoiding Disputes

Both wills and living trusts can come under scrutiny if heirs or others believe there’s foul play. For instance, claims of undue influence or lack of capacity can occur with either document. However, the probate process automatically includes a court review, which can give disgruntled relatives a natural forum to raise objections.

When assets are held in a living trust, potential challengers might have to file a separate legal action to contest the trust’s validity. This can be a hurdle that discourages disputes. It doesn’t prevent them altogether, but it sometimes reduces the likelihood of frivolous claims. Additionally, a trust’s ongoing management might make it clear who has authority to oversee assets if you become incapacitated.

Planning for Incapacity

Estate planning doesn’t only address what happens after death. Many people also worry about who’ll manage their money if they fall ill or become incapacitated. A living trust can include provisions that let your successor trustee step in if you’re no longer able to handle finances. 

A will has no effect until you pass away, so it doesn’t help during incapacity. You may rely on a durable power of lawyer or an advance healthcare directive to handle those matters in tandem with your will. Some find it simpler to use a living trust that automatically covers incapacity scenarios, solidifying one seamless plan for asset management during life and after death.

Costs and Administrative Burdens

Setting up a living trust can involve upfront costs, including retitling properties and adjusting financial accounts. Some individuals feel that effort pays off later by reducing probate expenses and delays. Meanwhile, drafting a will is typically simpler at the start, but might pass higher costs to your heirs in probate fees. Remember to consider the following:

• Immediate financial outlay: A trust might cost more initially, but can save heirs time and money later

• Ongoing updates: A trust should be updated if you buy property, open new bank accounts, or change your distribution plan

• Probate fees: A will might be cheaper now, but more expensive after you pass away due to court proceedings

Many families find that a living trust’s long-term benefits outweigh the initial effort. Others prefer not to handle ongoing trust administration. The choice often depends on whether you prioritize current simplicity or future cost savings for your beneficiaries.

Possible Combinations

Some people believe they must pick one or the other, but many use both a living trust and a will. The trust typically manages the majority of one’s assets, while a pour-over will captures any items not placed in the trust. That pour-over will directs those leftover assets into the trust at death, though they may still go through probate briefly.

For example, if you forgot to retitle a bank account into your living trust or acquired property shortly before passing, the pour-over will shifts them into the trust. This approach can simplify asset distribution overall, though it doesn’t entirely avoid probate for those assets.

Reach Out Today

At the Law Offices Of Gary R. Kershner, I’m here to help you form a plan that honors your wishes. I work with clients in Oakland, California, and throughout the Bay Area, including Berkeley, Alameda, Emeryville, Rockridge, Piedmont, Fruitvale, Fremont, San Jose, San Francisco, and beyond.

Call or send a message today so we can discuss which estate planning tools match your goals.