Estate planning: wills vs. trusts

In California and across the U.S., it is important to have an estate plan. This plan can be guided by a will, one or more trusts, or a combination of both. Usually, either the will or the trust will have primary importance in an estate plan.

When individuals use a will, they own assets under their own names, and the distribution of assets is determined by the will. With a revocable living trust, assets are owned by the trust, and the trust agreement determines how assets are distributed after someone has passed. An important difference between a will and a trust is that assets transferred through a will must go through probate, but assets transferred through a trust do not need to go through probate.

There are different factors to consider with probate in estate planning. Probate can be costly and take a long time for assets to be distributed, even for smaller estates. It should be noted, however, that some states have adopted versions of the Uniform Probate Code, which makes probate much less costly and time-consuming.

It is also important to note that there is less privacy when going through the probate process with a will vs. asset transfer with a trust. The will needs to be filed in court and be available to the public for viewing. This process can allow for checks and balances that some might consider beneficial to a fair asset transfer process.

Estate planning with a will or trust can allow individuals to safely transfer assets to their family members after their passing. In many cases, these assets have been accumulated over a lifetime, so it may be important to have an estate planning lawyer to help ensure that property is transferred correctly and most efficiently based on individual needs.