For many families in Washington, having both a will and a trust can provide stronger protection than just having one of these documents. Depending on your estate and goals, drafting a will alone may or may not be enough to meet your needs. A will and a trust are two different estate planning tools that perform differently but also complement each other.
A will is the foundation of your estate plan
A will is a legal document that performs critical jobs that no other document can. First, it allows you to direct where your assets should go after your death. This includes properties and assets that you cannot put in a trust or are better left off a trust, such as vehicles and 401(k)s. Without the protection of a will, Washington courts may consider your assets as intestate and distribute them according to state law, which may not align with your wishes.
Second, a will is the only document that Washington courts may consider for the guardianship of your minor children if something happens to you. As a parent, this makes writing a will critical for the protection of your child’s well-being and best interests.
Third, it is through a will that you name an executor, a person who has the authority to settle your estate according to your wishes.
While a will is essential and sometimes enough for individuals with small, straightforward estates, it does have its limitations. When you pass away, your will must go through the public court process of probate. This legal step ensures the fair distribution of assets but it is often time-consuming and costly. Avoiding probate would allow a more efficient transfer of assets to heirs, a benefit that a living trust can offer.
A trust serves to shield your assets and your family’s future
A living trust can be the answer to the limitations a will may present. There are many types of trusts but they mainly fall into these two categories:
- Revocable living trust: Provides a grantor the power to make changes to the terms of the trust throughout their lifetime
- Irrevocable living trust: Protects assets from threats such as creditors by transferring complete ownership from the grantor to the trust
For many families with smaller estates in Washington, a revocable living trust is often the more attractive option for complementing a will. The assets you assign through a revocable living trust do not need to go through probate, helping your family’s affairs stay private and facilitate the distribution of your assets more quickly. It also offers a powerful benefit that a will cannot: it protects you during your lifetime. If you become incapacitated, the person you named as your successor trustee can take charge of your financial affairs without court intervention.
If you have a larger estate, an irrevocable living trust may provide even more protection and benefits akin to your situation. Although it would relinquish you from all ownership and control of trust assets, this also means that those assets are protected from your creditors or from being considered as marital property in divorce.
Figure out the level of protection you need
Every family’s situation is unique. Determining which tools you need hinges on your specific circumstances. A will can offer basic protections that allow you to pass on assets and appoint a guardian for your minor children. A trust can provide added securities such as preventing assets from going through probate or landing in the hands of creditors. Together, they can create a strong estate plan that meets your every need.
To better understand what estate planning tools you need, consider discussing your goals with an experienced estate planning attorney.