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What is the difference between a Will and a Living Trust?

A Living Trust will avoid Probate for all assets held in Trust, saving the estate on Probate fees, which are based on the gross value of the entire estate. However, even with a Trust, the attorney and the trustee will receive fees, but these fees are generally less than a Probate proceeding. A Living Trust is not a public document and is not recorded. A Will, on the other hand, is logged with the County Clerk and available to anyone for any purpose. Also, in Probate, all documents are available for the public to inspect, including the listing of assets, beneficiaries, and distribution terms. If an estate is more than $5,000,000, the appropriate Trust document could save thousands of dollars in estate taxes at death. A Will generally just passes property to the beneficiaries without any tax planning. A Living Trust document tends to be lengthy and takes effect immediately upon execution. Normally, the parties for whom the Trust is prepared are the initial Trustees of that Trust and have complete control over all Trust assets. A Will, however, does not become effective until the death of the testator (person whose Will is being administered). These are just a few of the major differences between a Will and a Trust.

What happens if I don't have a Will or a Trust?

Your estate will pass by "intestate succession," meaning the State of California decides who gets your assets. Depending on whether or not you are married and have children your estate will pass to your spouse, your children, or your closest living blood relative.

What is a Pour Over Will?

A Pour Over Will is a Will, which merely pours any assets not titled in your Trust into your Trust after death. This does not prevent the need for Probate; if assets held outside of the Trust exceed $150,000, a Probate may be required for the Pour Over Will. The Pour Over Will merely lets the trustee distribute the assets according to the terms of the trust, rather than distributing them outright by the terms of the Will.

How do the cost of a Will and the cost of a Trust differ?

The initial cost of a Will is less than the cost of a Trust. However, if you want a Will with Durable Powers of Attorney for Finances and Health Care, the cost escalates and can be almost as much as a Trust package. Normally, when a trust is prepared, it comes with the Trust, Pour Over Will, Durable Power of Attorney for Finances, Power of Attorney for Health Care, and funding instructions for the Trust.

Are there any advantages to Probate?

If you have a lot of debts, or if your beneficiaries don't get along, or you are unsure of the capability of your executor, a Probate may be appropriate since it is court supervised. The court must approve all actions of the executor, including payment of debts and distributions. Although the Probate may cost more, some people prefer the court supervision.

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