Your will and your trust are both important in determining what will happen to your assets after your death and the death of your beneficiaries.
A last will and testament
When you die:
- A will generally describes who inherits certain assets after your death.
- If you leave property outright to someone in a will, they become the owners at the conclusion of probate .
- The executor may not be able to take control of probate assets without approval of the probate court, which may take some period of time.
- The intended time frame of probate is actually as short as possible; the process is not intended to allow an executor to spend years managing the assets in the estate.
When your beneficiary dies:
- When your beneficiary dies, their will or state intestate succession rules determine who will inherit the property you gave them, assuming they have not transferred or sold it prior to that time.
A living trust or a testamentary trust
When you die:
- A trust can include instructions giving someone the right to income and the use of the property during their lifetime.
- A trust agreement may include elaborate directions regarding the management of certain trust assets and may contemplate an administration that lasts a very long time.
A trustee can take immediate control of trust assets.
When a beneficiary dies:
Your trust can leave instructions on who has the right to income and the use of the property when the first beneficiary dies. There are many situations in which you may want to control the second instance of inheritance:
- You want to provide your children with income but you want the assets to go to your grandchildren. If your children marry, your grandchildren’s inheritance cannot be je0pardized by a possible divorce.
- You have been married before. You want to provide income for your surviving spouse but also want to be sure your children from your prior marriage inherit some portion of your assets when your surviving spouse dies.
- You want to be sure your children inherit your separate assets if you die first, eliminating the opportunity for a spouse or step children to claim rights to your separate property.
- You have minor or disabled children and you want to provide for their support and choose when or if they inherit the principal.