For many people who are new to estate planning, the big question of concern is whether they should have a will-based estate plan or a trust-based estate plan. Both a will and a trust provide someone control over how assets get distributed after his or her death, although they work in different ways.
Choosing a will or a trust is always a personal decision that should be made with your specific circumstances and estate planning goals in mind. However, the choice between a will or a trust can feel misleading if you do not realize that you may need a will even if you choose a trust-based estate plan.
Why would I need both documents?
Choosing a trust-based estate plan is a great choice for many people. It can help your estate to avoid probate, keep your estate and beneficiary information private, and allow you more control over the specific circumstances of asset distribution.
However, it can be time-consuming to transfer ownership of all your assets to the trust. If you forget about an asset or run out of time to add it to your trust, it will most likely go through probate and be distributed according to New York’s intestate succession laws.
To prevent this from occurring, you could create a pour-over will. It is called this because any assets that do not make it into your trust before your death can be “poured” into your trust according to the provisions of your will. Once these assets have been added to your trust after your death, they can be distributed according to the wishes you stated in your trust.
Unfortunately, pour-over wills, like other wills, require probate. This means that whatever property is not in your trust when you die will end up going through probate and becoming a part of public record before being transferred to your trust. For this reason, many people consider their pour-over will as only a safety-net.
Both wills and trusts have advantages and disadvantages. If you are beginning work on your estate plan, you may still need to decide if a will-based plan or a trust-based plan is best for you. However, it is important to keep in mind, that the best plan for your situation could involve both a will and a trust.