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How can you use wills and trusts together in your estate plan?

On Behalf of | Sep 28, 2022 | estate planning | 0 comments

When creating an estate plan, many people think that if they have a trust, they do not need a will and vice versa. Wills and trusts can accomplish similar goals, but they can also work together to create a better estate plan.

According to CNN, even if you have a trust, you may want to write a will too.

What can a will accomplish that a trust cannot?

If you have young children, wills are imperative because they allow you to name a guardian for your child. Wills make it easy to transfer guardianship to another person. Additionally, you can change your will at any point in your life. Most recommend changing it as you go through various life events.

If you have a trust, you may consider a pour-over will. The pour-over will ensures that any assets you meant to put in your trust before you died will go into the trust upon your death.

What is the purpose of a trust?

When you put items into an irrevocable trust, you retitle them. You no longer have ownership of those items; instead, they belong to the trust. Revocable trusts, on the other hand, allow you to add most of your assets. Trusts are most useful when it comes to property and life insurance policies. Putting assets in a trust also allows you to avoid gift taxes and probate costs.

An estate plan can consist of a will, trust or both entities to ensure your assets pass to the loved ones of your choice.