There are many advantages to putting assets in a revocable trust for distribution to your loved ones and intended heirs after you die. Like a will, a trust allows you to distribute your property to exactly whom you choose upon your death. Unlike a will, however, a trust does not go through the probate process, meaning that your heirs may receive their bequests more quickly. In addition, you can stipulate how much each beneficiary is to receive at one time, which is especially useful if you think your heirs may be tempted to spend the entire inheritance all at once.
With all the benefits that a revocable trust offers you, you may wonder whether you need a will at all. However, there are limitations on what a trust can do, and depending on your situation, you may find that you require both a will and a revocable trust.
Minor Children Guardianship
A revocable trust deals exclusively with property, which means you can set one up to secure an inheritance for your children. However, if your children are still minors, you need a will to name a guardian to care for them in the event that you and the other parent die before they reach adulthood. This is one of the most significant tasks that a will can accomplish but a trust cannot.
Suppose that you have one or more debtors who owe you money, and you have decided that you wish to cancel their debts and relieve them of their obligations upon your death. This generous wish must be expressed in a will, because a living trust allows no such provision.
Advance Medical Directives
If you have specific wishes in regard to the medical treatment you do or do not want to receive in the event that you become permanently incapacitated, your estate plan should include a document called a living will that expresses these wishes. A trust is not a suitable tool to address this type of issue.
It is extremely unlikely that you will be able to transfer all your property to a revocable trust. Some property shouldn’t go into a revocable trust at all, such as motor vehicles, life insurance, health savings accounts, and qualified retirement accounts. You need a will to take care of any property that remains outside the trust for whatever reason.
When you have a revocable trust to contain most of your property, you should need only a simple, bare-bones type of will to tie up any remaining loose ends. Contact a trust lawyer in Cherry Hill, NJ for more information about setting up a living trust.
Thanks to Klenk Law for their insight into estate planning and borrowing from trusts.