The Difference Families Should Know Between a Will and a Trust
For many Oakland families, creating an estate plan begins with one basic question:
Do I need a will, a trust, or both?
The answer depends on your family, the property you own, how you want your assets handled, and what you want to happen if you become unable to manage your own affairs.
A will and a living trust are both important estate planning tools, but they serve different purposes. In many cases, a comprehensive California estate plan uses them together.
At LaVelle Law Offices, our Oakland estate planning attorneys help individuals, couples, families, homeowners, and business owners throughout Oakland and the East Bay understand their options and create plans designed around their goals.
Quick Answer: What Is the Difference Between a Will and a Trust in California?
A will provides instructions about how certain assets should be distributed after death and can nominate guardians for minor children.
A revocable living trust can hold and manage assets during your lifetime, establish who manages those assets if you become incapacitated, and allow properly titled trust assets to pass to beneficiaries without formal probate.
Many California estate plans include both a living trust and a will, along with powers of attorney and an advance healthcare directive.
Why Estate Planning Matters for Oakland Families
Estate planning is not only for wealthy individuals.
If you own a home, have children, maintain bank or investment accounts, own a business or simply want to control who can make decisions on your behalf, an estate plan can provide important protections.
For Oakland and East Bay residents, a thoughtful plan may help answer questions such as:
- Who receives my property after I die?
- Who manages my finances if I become incapacitated?
- Who can make healthcare decisions for me?
- Who should care for my minor children?
- Can my family avoid an unnecessary probate proceeding?
- What happens to my home?
- What happens to my business interest?
- How can I make the process easier for the people I leave behind?
Estate planning is ultimately about creating clear instructions before they are needed.
Learn more about Estate Planning at LaVelle Law Offices.
What Is a Will?
A last will and testament is a legal document that allows you to state how you want certain property distributed after your death.
A will can also identify the person you would like to serve as executor and, for parents, nominate a guardian for minor children.
What Can a Will Do?
Depending on your circumstances, a will may:
- Identify beneficiaries
- Provide instructions for distributing certain assets
- Name an executor
- Nominate guardians for minor children
- Coordinate with a living trust
- Express other estate-related instructions
Does a Will Avoid Probate in California?
Not necessarily.
This is one of the most common estate planning misunderstandings.
A will tells the court and your family how you want your estate handled, but having a will does not automatically keep an estate out of probate.
Whether probate is required depends on factors such as the value of the estate, how assets are owned and whether other transfer mechanisms apply.
That is one reason Oakland homeowners and families often consider whether a living trust should be part of their plan.
What Is a Revocable Living Trust?
A revocable living trust is created during your lifetime and can hold ownership of certain assets.
Typically, the person creating the trust continues to control those assets while capable of doing so.
The trust also identifies a successor trustee who can manage trust property if the creator becomes incapacitated or dies.
What Are the Benefits of a Living Trust?
Depending on the situation, a properly established and funded living trust may:
- Help certain assets avoid probate
- Provide continuity in asset management
- Establish how property should be distributed
- Allow a successor trustee to manage trust assets if you become incapacitated
- Provide more detailed instructions for beneficiaries
- Help make administration more efficient for surviving family members
The important phrase is properly funded.
Signing a trust document by itself does not necessarily place your home, financial accounts or other property into the trust.
Ownership and beneficiary arrangements must coordinate with the estate plan.
Will vs. Living Trust: A Simple Comparison
A Will
A will generally becomes operative after death.
It can identify beneficiaries, nominate an executor and nominate guardians for minor children.
A will alone does not necessarily avoid probate.
A Revocable Living Trust
A living trust exists during your lifetime.
It can hold certain assets, provide instructions for incapacity and establish how trust property should eventually be distributed.
Assets properly transferred into the trust can often pass without formal probate.
Do You Need Both?
Many estate plans use both documents because they perform different functions.
A living trust may be the primary tool for managing and distributing property, while a pour-over will can address property that was not properly transferred to the trust and provide other important instructions.
What Should Be Included in a Complete Oakland Estate Plan?
A comprehensive estate plan is usually more than a will or trust.
Depending upon your circumstances, your plan may include:
Revocable Living Trust
Establishes how trust assets are managed during your lifetime and distributed later.
Last Will and Testament
Provides instructions for certain assets and can nominate guardians for minor children.
Durable Power of Attorney
Allows someone you trust to handle designated financial and legal matters if you cannot handle them yourself.
Advance Healthcare Directive
Identifies who can make healthcare decisions if you are unable to communicate your own wishes.
Guardian Nominations
Parents can identify the individuals they would want considered to care for their minor children.
Beneficiary and Asset Review
Retirement accounts, life insurance, bank accounts and other assets may transfer according to beneficiary designations rather than your will.
Your documents and account designations therefore need to work together.
Learn more about what estate planning includes.
Oakland Homeowners Should Pay Particular Attention to Their Estate Plans
For many Bay Area families, their home is one of their most significant assets.
Owning real estate can make estate planning particularly important because the way the property is titled can affect what happens after an owner’s death.
An estate planning attorney can help evaluate how real property fits into the larger estate plan and whether transferring ownership into a living trust is appropriate.
A trust should not simply exist on paper. The plan should be structured so that the appropriate assets are actually coordinated with it.
Estate Planning for Oakland Parents
Parents have additional issues to consider.
An estate plan can address:
- Who you would want caring for minor children
- Who should manage inherited assets for those children
- At what age or under what circumstances children should receive an inheritance
- Who should make financial decisions if you become incapacitated
- Who should make healthcare decisions for you
Without planning in advance, important decisions may eventually have to be addressed through legal proceedings rather than through instructions you established yourself.
Estate Planning for Oakland Business Owners
Business owners may also need to coordinate personal estate planning with business succession planning.
Important questions can include:
- Who can operate the business if you become incapacitated?
- What happens to your ownership interest after death?
- Should family members inherit the business?
- Should the business be sold?
- Are there agreements governing transfer of ownership?
- Does your estate plan coordinate with your business documents?
Estate planning for entrepreneurs should consider both the personal estate and the business asset.
When Should You Update Your Will or Trust?
Estate plans should evolve as your life changes.
Consider reviewing your plan following:
- Marriage
- Divorce
- Birth or adoption of a child
- Death of a beneficiary
- Purchase or sale of a home
- Starting or selling a business
- A major change in finances
- Moving to California
- Changes in your relationship with a trustee, executor, or agent
- Significant changes in your family
Even if nothing dramatic has happened, periodic reviews can help determine whether your documents still reflect your wishes.
Frequently Asked Questions About Wills and Trusts in Oakland, CA
Is a living trust better than a will in California?
Neither document is universally “better.” They accomplish different objectives. Many comprehensive California estate plans use both a living trust and a will.
Do I need a living trust if I own a home in Oakland?
Homeownership is one reason many Californians discuss living trusts with an estate planning attorney. Whether a trust is appropriate depends on your property, family situation, goals, and overall estate.
Can a living trust help my family avoid probate?
Property properly transferred to a living trust can generally pass to the beneficiaries through trust administration rather than formal probate. Other assets may transfer through different mechanisms.
Does everything I own go into my trust?
Not necessarily. Certain assets may remain outside the trust or use beneficiary designations. An attorney can help determine how each asset should coordinate with your plan.
What happens if I have a trust but never put my property into it?
A trust that has not been properly funded may not accomplish all of the goals you intended. Funding and asset coordination are important parts of the estate planning process.
Who needs an estate plan?
Estate planning can benefit homeowners, parents, married and unmarried couples, business owners, retirees, and anyone who wants greater control over financial, healthcare, and inheritance decisions.
Speak With an Oakland Estate Planning Attorney
Creating a will or trust is not simply about preparing documents.
It is about creating a coordinated plan for your family, property, healthcare decisions, and future.
LaVelle Law Offices assists clients throughout Oakland, Alameda County, and the greater East Bay with wills, trusts, and comprehensive estate planning.
LaVelle Law Offices — Oakland
1901 Harrison Street, Suite 1100
Oakland, CA 94612
Whether you are starting your first estate plan, purchasing a home, raising a family, planning for retirement, or reviewing documents prepared years ago, our attorneys can help you understand your options.
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This article is provided for general informational purposes only and is not legal advice. Estate planning needs vary according to individual circumstances. Consult an attorney regarding your specific situation.
