If I have a Trust, Do I need a Will?

This edition of the Koldin Law Center E-Newsletter is part of a series on questions we received from our “contact us” form on our website about Elder Law, Estate Planning and Medicaid.

All prior newsletters are saved on our website. You can read them by clicking here.

Yes, a Will covers any assets that are in your own name. A Trust covers solely the assets you transfer to your Trust.

Example:  John set up an Irrevocable Trust to protect some of his life savings in the event he needs long term care in a nursing home. John transferred his house and his brokerage account to his Trust. John has a CD, a Savings Account, and a Checking Account in his own name. Both the Trust and Will name John’s children as beneficiaries.

The house and the brokerage account will pass directly to John’s children from the Trust on John’s death. The Trustee will sign a deed to transfer the house to the children. The Trustee will also close out the brokerage account and transfer the account to John’s children. It is a simple process and no costs or delays of probate are needed.

Since the CD, Savings Account, and Checking Account are just in John’s name, those assets pass through John’s Will which needs to be Probated in order to pass those assets to his children.

Probate is the Court proceeding to “activate” the Will and authorize the Executor to carry out the terms of the Will.

John can avoid or minimize the costs of Probate by (1) transferring more accounts to his Trust, (2) Making the Accounts Joint with someone else with Right of Survivorship, or (3) Designate Beneficiaries on the Accounts.

Even if John takes all steps to avoid Probate, having a Will is important in case there is an oversight and something needs to be covered by the Will.