How Wills and Trusts Work Together to Avoid Probate
What does "living trust will" mean? It’s not really a legal term. Nevertheless, it is a term occasionally used as people begin to explore the use of a living trust. People commonly think of using a will to distribute property after someone’s death. The confusion probably comes, because people know that the trust will distribute property after a death.
A living trust and a will are separate and distinct, although a living trust can be thought of as taking the place of a standard will. So, when someone asks me for a "living trust will", I’m not sure what they really want. A will and a living trust are two very different legal documents. Actually, there should always be a will accompanying a living trust. It is called a "pour over will". Using a pour over will is a safety device implemented with living trusts.
The majority of the people who set up a living trust do not avoid probate. There is a legitimate argument in the legal community against living trusts, because so many of them fail to give the probate protection that was "sold" to the family. The problem isn’t the trust. The way attorneys are educating their clients is the problem. In order to avoid probate, clients need to be educated on how to "use" their living trust.
The deceased’s assets will need to be probated if the living trust does not function properly. There is no other option than going to the probate court for a prolonged legal proceeding. When there is a will, the probate court will use it to help them make decisions throughout the probate proceedings. In the absence of a will, an "intestate" proceeding must take place. Dying without a will is dying "intestate".
A pour over will should be drawn in conjunction with a living revocable trust. The probate courts can use the pour over will to direct them through the process if probate becomes necessary. Hopefully, the pour over will won’t ever be used, because the trust will avoid probate on all of the decedent’s assets.
A standard will distributes the property outright, unlike the pour over will which does not. When property needs to be probated, the pour over will tells the court that all of the property should be "poured over" into the living revocable trust, and then distributed as outlined in the living trust. In his new book, Guaranteed Millionaire, Lee R. Phillips discusses in detail revocable living trusts and pour over wills. When you order Guaranteed Millionaire, you will receive absolutely FREE the DVD, "Using the Law to Make Money and Protect Your Assets ". Orders placed by the end of the month will get $5 off the purchase price.
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