How Wills and Trusts Work Together to Avoid Probate

Let’s talk about the term "living trust will." It is not really a proper legal term. Even so, when people start to check out living trusts, it is a term they commonly use. Distribution of property at someone’s death is generally understood as the primary purpose of a will. A trust also distributes property after a person’s death, which can lead to the confusion and the use of the term "living trust will."

A living trust can substitute for a standard will in some ways, even though a living trust and a will are two separate legal documents and concepts. So, when someone asks me for a "living trust will," I’m not sure what they really want.A living trust is a different legal document from a will. When a living trust is written, it will always have a will called a "pour over will" to go with it. Utilizing a pour over will with a living trust provides a safeguard.

Living trusts are often referred to as "living revocable trusts" or "revocable living trusts," because they are always revocable. That means that the maker of the trust can revoke the trust and move everything back to status quo anytime he or she wants. Living trusts will enable people to leave more to their heirs, while avoiding estate taxes and probate. Probate will only be avoided if the revocable living trust is properly set up and managed.

Most people who get a living trust do not avoid probate. Because so many trusts fail to give the protection from probate that the client thought they were getting, the legal community has raised many bona fide arguments against them. The problem isn’t the trust. It is a problem with the attorneys and how they educate their clients. Most of them don’t give the client enough education, and they don’t know how to "use" their living trust, so the trust fails to avoid probate.

A living trust will avoid probate if it is handled appropriately. If it doesn’t, then the deceased’s assets will need to be probated. Going through a long legal process at the probate court will be necessary at this point. 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. Intestate means that there isn’t a will.

A living revocable trust should be implemented with a pour over will. When there is a pour over will and if for some reason the assets need to be probated, the probate courts will look to the pour over will to help with the probate process. If all goes well, nothing will need to be probated and the pour over will won’t be used.

A pour over will does not outline how property is distributed in the same way a traditional will does. After the probate proceeding, the pour over will instructs the court to "pour over" all of the assets into the living revocable trust to be distributed as detailed in the living trust. Lee R. Phillips’ new book, Guaranteed Millionaire discusses revocable living trusts and pour over wills in detail. All orders for Guaranteed Millionaire will also include the FREE DVD, "Using the Law to Make Money and Protect Your Assets." Order by the end of the month, and get a $5 discount.