A Will takes effect only upon death. A Will directs who gets your property after you die and who will be the executor. A professionally written Will can insure that your assets are distributed exactly as you desire. However, for a Will to have the desired effect, it usually will have to go through a court supervised probate, which is a public proceeding and takes from nine months to several years to complete. There are court costs and attorney fees associated with all probate administrations.
A formal Will requires two (2) witnesses to its execution. In California, a Will should never be notarized. To avoid potential problems, the witnesses should not be people who are mentioned in the Will. A properly drafted Will can also serve to avoid the need for a guardian of the estate when you have minor children.
It’s important to know that certain types of assets are not covered by the provisions in a Will. These assets include life insurance policies, property held in joint tenancy, IRAs, trusts and pensions.
Like a will, a trust directs who will inherit your property after your death. However, a trust also provides for the management of your assets during your life if you should become incapacitated.
You do not lose control of your assets by creating a trust. You decide who the trustees (managers) will be and how your assets are managed. You can also provide for your beneficiaries in whatever manner you feel to be best – such as periodic payments, ongoing gifts, life-time support, etc.
Generally a trust is not subject to probate or other court proceedings. Thus, your personal matters are kept private, known only to those people named in the trust.
A trust will cost more than a will to prepare and involves more paperwork. However, a trust is generally not subject to the expenses and time delays of probate and can often provide large tax savings.
In combination with the proper powers of attorney, a trust can help avoid court supervised guardianships and conservatorships.