Estate Planning vs Will vs Trust in California: What Is the Difference?

Hinojosa & Forer LLP

Knowing the difference between estate planning, wills, and trusts is essential for the future of your assets and your family. As you move through life transitions like finding a career, buying a home, and raising a family, you’ll likely accumulate assets. With more assets comes greater responsibility, and you may find yourself wondering what will happen to them if you pass away or become incapacitated. At this point, it’s time to hire an estate planning attorney to help secure you and your family’s future.

Preparing yourself and your family for the future can bring with it a sense of security and peace of mind. You may feel the benefit of knowing that if and when needed, your family will feel less stress and more confidence during an already difficult time. However, in order to understand how estate planning can benefit you, it’s crucial to understand the difference between documents like wills and trusts.

What Is Estate Planning?

An estate plan is a guide for helping your loved ones with medical care and financial matters. This guide can be helpful while you’re still alive but unable to make certain decisions and tend to personal responsibilities. In the state of California, an estate plan can include assigning your Power of Attorney, as well as ensuring a living will and a trust are in place. Having an estate plan ensures your health decisions and financials are being handled by someone you delegate if you are incapacitated.

Other forms might be included for major sickness or death to further ensure decisions are made in accordance with your wishes while you’re incapacitated or after you pass away. Estate plans may elevate certain taxes, but they must be created before death.

What Is a Will?

A will is a legal document listing assets and property along with how they are to be distributed. It may include things like personal property and real estate. A will can go through probate, which is when the court determines whether it is valid, assesses estate documentation, and distributes assets after death if there is no trust available. A will goes into effect upon the creator’s death. All estate plans should have a will, but a trust isn’t necessary for every plan.

What Is a Trust?

A trust is a more complex document that lists the arrangement made by the trustee and a third party to hold onto and safeguard assets for the beneficiary. With a trust, funding and assets may be placed aside while you are still alive and go into effect immediately. Trusts are also more private, avoid probate, and allow distributions to move more quickly.

Things to Consider While Estate Planning

The differences between the options offered by different estate planning devices can feel overwhelming. A skilled attorney will already know the details about these differences and how they pertain to your circumstances. While deciding which options are right for you, a lawyer may help you begin by considering things like:

  • Organizing and creating inventory
  • Child guardianship
  • Family needs
  • Healthcare wishes
  • Power of Attorney
  • Life insurance
  • Trust accounts

Why Hire a Lawyer?

Establishing a will, trust, or estate plan is not only complex and emotional, but it could also stir up family tensions, causing this task to feel more daunting. A lawyer who has experience will know how to help avoid conflicts.

An estate planning lawyer can answer your questions and help you choose a plan that works for your needs while maximizing your options and resources. You can feel less stress knowing that the documents will be handled in a timely and professional manner. Your attorney can ensure that your estate plan details the manner in which you prefer your assets to be distributed.

Who Can Start a Plan?

Anyone of legal adult age can start an estate plan for their future. You do not need to have a large number of belongings or a significant amount of finances. The earlier you start, the better. Certain documents can be updated periodically as needed.

FAQs

Q: Is It Better to Have a Will or a Trust in California?

A: Whether it’s better to have a will or a trust in California will depend on your unique circumstances and wishes. A will can be less costly to create, but it is subject to probate and may take longer to distribute funds. A trust may cost more but can address multiple objectives, allow more precise control, and be effective immediately. Speaking with a lawyer can clarify this decision by giving you options based on your individual needs.

Q: Does Trust Override a Will in California?

A: A trust may override a will because it goes into effect immediately while you are alive, while a will only goes into effect proceeding death. Because of this, California probate laws see both as serving the same purpose. A will will not have authority over assets that have already been placed in a trust.

Q: What Are Three Advantages of a Trust Over a Will?

A: Three advantages of a trust over a will include the following:

  • More detail, allowing for more control and customization of your distributions
  • More privacy due to the ability to bypass probate
  • A trust can go into effect during your lifetime, while a will only becomes effective after death. Therefore, you could distribute assets through a trust while you’re still alive.

Q: What Are Some Disadvantages of a Trust Over a Will?

A: Some disadvantages of a trust over a will include the fact that the cost of a trust is higher than that of a will. Creating a trust is more time-consuming and difficult. Because of these complexities, it is even more important to have an experienced attorney to help with each step and ensure needs are met.

Finding Comfort in Planning Ahead

By planning ahead for the future, you can provide a sense of security to both yourself and your loved ones. At Hinojosa & Forer LLP, we can answer your questions and begin crafting an estate plan that suits your needs, interests, and wishes. The earlier you start, the better prepared you will be. Contact our skilled legal team today.

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