Differences Between a Will and a Trust in San Diego

People often ask about the differences between a will and a trust.  This is a good question because both these documents are used to designate who receives your assets when you die.

The essential difference is that a will becomes effective when the person who signed the will (testator) dies.  A trust, on the other hand, becomes effective when the person who created the trust (trustor) signs a trust agreement or declaration of trust.

With respect to a trust, you must formally transfer into it all the titled assets you intend to become part of the trust.  Titled assets have their legal ownership reflected by title documents, such as a deed to real property or financial account statements.

Generally, for a will to be valid in California, it requires that the testator sign the will in front of two witnesses, who then sign the will themselves.  A trust needs to be signed by the trustor, and preferably before a notary public.

The primary reason to use a trust instead of a will is to avoid an expensive and lengthy court administration (probate) of one’s estate following death.  If an estate passing under a will contains real property and/or other property exceeding a certain value, it must be probated.  Assets passing under a trust, however, do not require a probate.  Here, the successor trustee is to make the dispositions of the  assets called for by the terms of the trust.

Ironically, even when you create a trust as your primary estate planning document, you should still create what is called a “pour over” will.  The main purpose of this type of will is to direct that any titled assets which you failed to transfer into your trust are to pass after your death to your trust, to be distributed in accordance with the trust’s terms.  However, a pour over will may still require a probate if the titled assets exceed a certain monetary value.

As you can see, both a will and a trust serve a purpose in an estate plan, and we are here to help prepare what is best for your needs.

The above statements are generalizations only and are not to be taken as legal advice for the reader’s particular situation.