Why You Need a Will Even if You Have a Living Trust

A living trust is a popular estate planning tool that people often see as an alternative to a last will and testament. A trust lets you manage your assets during your lifetime while designating beneficiaries to receive them directly upon your death. A trust offers flexibility, privacy and control, allowing you to serve as trustee and to modify it throughout your lifetime. It can even provide asset management in the event of your incapacity. Assets in the trust do not need to go through probate court, which can save beneficiaries delays and costs.

However, despite the advantages of a living trust, a last will and testament should remain a component of your comprehensive estate plan. Here’s why:

• Distributing assets outside the trust — A living trust holds and manages only the property that is transferred into it during your lifetime. However, you may overlook certain assets or may acquire new property after the trust is created. Examples are investment dividends, gifts and inheritances you may receive. A will acts as a safety net. It typically contains a residuary clause, dictating the distribution of any assets in your estate that are not specifically bequeathed or devised. Without a will, these assets may be subject to state intestacy laws, potentially going to unintended beneficiaries.
• Distributing personal property — While a trust manages significant financial assets, a will can provide more specific instructions for distributing personal property, such as sentimental heirlooms, jewelry, or collections. You can create a memorandum within your will to detail the distribution of these items, ensuring they go to the intended recipients.
• Nominating guardians for minors or special needs individuals — A will is the proper legal instrument to nominate individuals you trust to care for your children if you and their other parent are deceased. This also goes for naming guardians for relatives who are mentally challenged or otherwise in need of care. A living trust cannot accomplish those purposes.

You can create a “pour-over will” to work in conjunction with a living trust. It acts as a catch-all, directing that any assets not transferred into the trust during your lifetime will pass into the trust upon your death. This means that all your assets are ultimately distributed according to the terms of your trust. Although a pour-over will must go through probate, the proceeding can be far quicker and less expensive since there is only one beneficiary — the trust — and the value of the assets is typically low.

Estate planning is a complex area of law, and the approach that’s right for you can depend on your individual circumstances. An experienced estate planning attorney can tailor your estate plan to your specific needs and goals, so that your assets are protected and distributed according to your wishes. An attorney can make sure your documents are legally sound under state law and can help you avoid common mistakes, such as improper titling of assets or inadequate beneficiary designations. 

Schnipper, Britton & Stobaugh creates comprehensive estate plans for Arkansas residents, including wills, trusts and other essential documents. To schedule an appointment with a dedicated attorney, call us at 501-762-0887 or contact our office online.