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How to Make Sure Your Trust and Will Avoid Probate
The words "living will trust" are not really good legal terminology. Nevertheless, it is a term occasionally used as people begin to explore the use of a living trust. Distribution of property at someone’s death is generally understood as the primary purpose of a will. To the novice, a will and a living trust look like they do the same thing, so naturally people become mixed up and use the term "living trust will".
Wills and living trusts have related, but different legal concepts and documents. In many respects, a living trust can serve many of the same purposes as a standard will. So, when the term "living trust will" is used, as a lawyer, I am not sure what is being referred to.A living trust is a different legal document from a will. Actually, there should always be a will accompanying a living trust. It is called a "pour over will". Utilizing a pour over will with a living trust provides a safeguard.
Sometimes living trusts are known as —"living revocable trust" or "revocable living trusts". The key here is that they are revocable. Being able to change or rescind the trust at any time is a key element of the revocable living trust. People use living trusts to avoid probate and get more value to their heirs without paying any estate taxes. Probate will only be avoided if the revocable living trust is properly set up and managed.
The majority of the people who set up a living trust do not avoid probate. There is some debate in the legal community against living trusts, because they are not providing the probate protection intended. This isn’t a problem with the trust. It is a problem with the attorneys and how they educate their clients. In order to avoid probate, clients need to be educated on how to "use" their living trust.
If the living trust does not work as it should, assets of the deceased will need to be probated. That means the family has to go through a lengthy legal process at the probate court. In the probate process, the probate court depends upon the will to understand the deceased’s wishes. If there isn’t a will, the probate court will treat the case as an "intestate" proceeding. Dying without a will is dying " intestate".
A pour over will should be drawn in conjunction with a living revocable trust. When there is a pour over will and if for some reason the assets need to be probated, the probate courts will look to the pour over will to help with the probate process. When the trust performs as intended and probate is avoided, the pour over will won’t be needed.
A standard will distributes the property outright, unlike the pour over will which does not. A pour over will instructs the court to " pour over" all of the assets into the living revocable trust and distribute the assets as stated in the living trust. Revocable living trusts and pour over wills are discussed in detail in Lee R. Phillips’ new book, Guaranteed Millionaire. Also order Lee's FREE DVD, "Using the Law to Make Money and Protect Your Assets".