People often assume that wills and trusts are somewhat interchangeable. While both can be effective to transfer assets to loved ones after your death, they have important differences.
A will is effective to transfer property that is in your name at your death. Typically, a will must be signed and witnessed by two people. A will “speaks at death,” in other words its provisions are not effective until death. Assets that are in your name are controlled by the will, even if there is a trust in existence. However, the will can provide that your assets “pour-over” into the trust.
By comparison, a trust comes into existence upon signing the document. While some states require a trust to be witnessed, the vast majority do not. A living trust holds title to the property transferred into it. If property is in a living trust, it will not be governed by the will because it no longer is in your name—it is in the name of the trust.
The importance of this distinction is illustrated by the circumstances surrounding Gay Dawn Tamplin’s death. Gay Dawn had both a will and a living trust. Gay Dawn lived in an Alaska condominium with her life partner, Larry Daly. Five years before her death, Gay Dawn set up a living trust and funded it with her condominium, avoiding the expense and invasiveness of probate. Upon her death, the trust was to distribute the condominium to her daughter, Gayleen.
In May 1998, Gay Dawn was diagnosed with a terminal illness. She had been living with Larry in her condominium for six years and decided he should have it after her death. While in the hospital, she wrote a will herself and in it said that Larry should have her condominium. The problem was that she no longer owned the condominium in her own name. She had transferred the property to her trust to avoid probate. The will was not effective to transfer an asset that she no longer owned. Nor was the will effective to amend the trust because the will did not “speak” until her death. By that time, it was too late to change the trust: Living trusts become irrevocable at death.
When tragedy strikes, people do not always think clearly. To accomplish her goal, Gay Dawn needed to amend her trust to provide that the condominium passed to Larry.
Legal documents have unique characteristics that may not be obvious at first glance. Especially when hardship looms, do not try to go it alone. A qualified estate planning attorney can be a kind and caring shoulder to help you through the process and prepare documents that accomplish your goals.
Morrison Law Group, PLC has devoted its practice to estate planning and elder law matters for more than 16 years. Our attorney, Mr. Ronald “Chip” Morrison, Jr. has been a Member of the American Academy of Estate Planning Attorneys since 2017. Morrison Law Group, PLC is one of only three firms in Louisiana to be admitted to Academy Membership. Our firm has helped thousands of clients meet their estate planning goals and pass on lasting legacies to their loved ones. To learn more about how you can achieve your estate planning goals, please call our office at 504-831-2348 or contact us through our website.