Differences Between a Will and a Trust

Differences Between a Will and a Trust in California     

By Attorney Paul Hanks, Ironclad Living Trusts in California

It is important to know the many differences between a Will and a Living Trust. A Revocable Living Trust is a very powerful estate planning tool. In contrast to a Living Trust, a Will is of limited utility to protect your estate and avoid probate.

Let’s begin with the benefits of a Will. If you do not own your home and your financial assets are of limited value, then having a Will alone should be sufficient to pass your estate without probate. But if you do own a home, a Will cannot not pass title to that home without a probate proceeding, and that applies even if the Will is uncontested. 

There are many other downsides to a Will. A Will does not prevent claims presented by the government for long term care services. A Will also does not allow for the ongoing management of a beneficiary’s estate interest. Another area where a Will fails is the need for protection of the elderly against elder financial abuse. 

A California Revocable Living Trust is far superior to a Will for many reasons. Here are some powerful benefits that come with a Revocable Living Trust: 

Probate Avoidance:

• A Revocable Living Trust Avoids a Probate Proceeding 
• A Revocable Living Trust completely eliminates the need for a spousal petition. 
• As an additional protective layer against probate, a Revocable Living Trust can be named as the beneficiary of certain financial assets. 
• It is very easy to add future assets to your existing Revocable Living Trust without the need for a law firm. 

Protection of Your Home:

• Once your home is deeded into a Revocable Living Trust, the recording of the new deed protects your home from loan fraud.  
• Since a Revocable Living Trust removes assets from probate the State of California cannot make a claim for the recovery of benefits paid on behalf of Medi-Cal members. 
• A trust contains powerful provisions for the protection of the elderly and allows the trustee to protect a vulnerable elder as they age and become vulnerable to scams.

Management of a Beneficiary’s Inheritance:

• A Revocable Living Trust can require the management and preservation of a beneficiary’s interest. A beneficiary could be reckless with money, or be subject to the control of a spouse. A beneficiary could be limited by medical issues and unable to work.  .  
• Protective inheritance trust provisions can be included in a Revocable Living Trust describing in detail how the trust creator wants a beneficiary’s share to be managed and preserved. 

Powerful Spousal Protections:

• A Revocable Living Trust contains carefully crafted provisions that are triggered once the first spouse dies. If a marital trust is not in place then the surviving spouse can do as they wish with the estate. A Revocable Living Trust provides the first spouse to die with the peace of mind that the estate will not end up in the hands of a stranger. A Revocable Living Trust assures that your estate will pass to beneficiaries who have been mutually chosen by husband and wife. 
• As part of the drafting of a Revocable Living Trust, the spousal property deed is examined to detect and eliminate any previously unknown capital gains tax issues.
• A Revocable Living Trust strikes the perfect balance for the surviving spouse’s comfort and standard of living while insulating the estate from fraudsters and opportunistic individuals.  

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If you wish to speak with an experienced estate planning lawyer, please contact us online or call us directly at (951) 587-3737. Ironclad Living Trusts is honored to  serve clients throughout all of Southern California.