When dealing with the complex and sensitive topic of estate planning, is it better to have a will or a trust in California? Unfortunately, there is no simple answer. Wills and trusts, while similar, are distinct categories of legal tools, each with its own benefits. Choosing the right tool will depend on your unique needs, goals, assets, and family situation — the team at the Law Office of Christopher P. Walker can help.
When it comes time to plan out the future of your California estate, deciding whether to put assets in a trust or assign them to heirs via a will can be one of the more consequential choices you’ll have to make. This can feel especially true when high-value assets or complicated inheritance situations are involved, but even Californians planning out modest, straightforward estates will need to be prepared to make these decisions.
Wills Versus Trusts in California: Understanding Your Options
One very important resource for choosing between wills, trusts, or other estate planning tools will be a reputable and successful estate planning attorney. Attorney Christopher P. Walker and his world-class team are well-versed in wills and trusts of all types and can help you deploy these tools in the most effective way possible as part of a comprehensive and legally sound estate plan.
As you begin to think about the future of your estate and the decisions to come, it’s important to do some preliminary research to gain a better understanding of key estate planning terms and concepts. To that end, let’s start zooming in on the specific pros and cons of wills and trusts.
Wills
When we talk about wills in the context of estate planning, we’re usually referring to the ubiquitous last will & testament, one of the foundational documents of any complete estate plan.
Pros
- Simplicity. A straightforward last will & testament is a relatively easy and cost-effective legal tool. While many estates will want to use multiple types of estate planning tools to create a comprehensive plan, some simpler ones can be handled with a will alone.
- Flexibility. A last will & testament does not go into effect until your passing, so you are free to update or amend it at any time. Regular review and updating of a will can be a good idea, as it allows your estate plan to evolve with the circumstances of your life.
- Guardianship. One important feature of a will is that it goes beyond purely financial matters. More specifically, a will allows you to designate a guardian for any minor children you would leave behind in the event of an untimely demise.
- Peace of mind. Your will essentially takes effect immediately upon your death. A properly prepared will allows an individual to make their final transition with peace of mind, knowing that the assets they leave behind will be distributed in accordance with their wishes and in as swift and drama-free a manner as possible.
Cons
- Probate. Wills need to go through the California probate court process, which can be tedious. While an estate with a proper will can certainly move through probate significantly faster than an estate with no valid will, the need to have the will validated by a probate judge can still temporarily hold up assets when surviving loved ones may need them the most.
- Public record. Once a will goes through the probate process, it becomes a matter of public record, as with many other types of documents filed with the court. This means that nosy neighbors, spurned would-be heirs, or even scammers can get a peek into private family business, which doesn’t sit well with some people.
- Limited protection. Due to the posthumous nature of a will and the mechanics of the probate court system, wills offer less protection against certain types of legal challenges when compared to trusts.
Trusts
Trusts are special tools that exist at the intersection of law and finance and can be used to powerful effect as part of an estate plan. Like wills, they allow you to designate beneficiaries to receive certain assets and properties, but trusts can be nearly infinitely customized with special stipulations and can go into effect before your passing, allowing you to see your estate plan in action.
Pros
- Avoid probate. Assets held in a trust can bypass the probate court process completely, saving time, money, and stress in the long run.
- Privacy. Trusts are private tools and typically not part of the public record.
- Asset management. Trusts allow for ongoing management of assets placed in them, even after the grantor’s death or incapacity. Rather than automatically taking effect upon your death, like a will would, specific stipulations can be set up for exactly how and when the entrusted assets will be distributed.
- Disability planning. In addition to asset transfer, trusts can be set up to cover other contingencies. For example, a trust could be created to manage assets in a certain way in the event the grantor becomes incapacitated.
Cons
- Cost. It is typically more expensive to create and maintain a trust than it is to draft your last will & testament.
- Complexity. Trusts require careful planning, active management, extensive knowledge, and oftentimes, the involvement of a dedicated trustee who must also be compensated for their work. Due to their highly customizable nature, a trust itself can also become extremely complex.
- Funding. You will also need to place assets into your trust, which can create issues for your financial liquidity. The trust then acts almost as a separate legal entity for the purpose of holding those assets. Compare this to a will, where the assets simply remain in your direct possession until your passing.
FAQs
Q: What Are the Disadvantages of a Trust?
A: The disadvantages of a trust in California include the cost of creating one, complex ongoing management needs, and the fact that a trust contains no provisions for guardianship of minor children. While trusts are powerful tools, they are not one-size-fits-all estate planning solutions by any means and need to be created and deployed strategically.
Q: Who Needs a Trust Instead of a Will?
A: No one “needs” a trust instead of a will because all of these tools are completely voluntary to use. Some people never draft a will at all, much less fund a trust in their lifetime. However, Californians with valuable assets, large estates, and complex inheritance scenarios may wish to create a trust instead of (or, more likely, in addition to) a will.
Q: Why Use a Trust Instead of a Will?
A: There are many reasons someone might use a trust instead of a will. Trusts are more customizable, giving you a greater degree of control over your assets, both during your lifetime and beyond. Trusts are also a great tool for estate planning purposes because they allow assets to pass to beneficiaries outside of the probate court system.
The Law Office of Christopher P. Walker, P.C., Your Team for Comprehensive Estate Planning Services
If you’re trying to choose between a will or trust for your California estate plan, we can help. As the premiere Orange County estate planning lawyer, We are able to guide you through creating an airtight will or managing a highly customized trust, depending on your specific needs and goals. Get the process started by contacting us for a confidential consultation with a member of our helpful and knowledgeable staff.