Wills and trusts: a complementary pair
To avoid the delays and costs that can accompany probate proceedings, an individual may assume that wills should be avoided. To the contrary, a comprehensive estate plan may be able to include both wills and trusts, while still minimizing the less desirable aspects of probate.
As a preliminary matter, a smaller amount of property that is subject to probate generally means fewer delays and expenses. For that reason, revocable living trusts can be a good idea. Property in a trust is controlled by the trustee, which means it won’t be part of the probate estate (even though it may still be subject to federal estate taxes). That control permits a trustee to bypass probate and transfer trust property directly to the beneficiaries.
However, the property in a revocable living trust is generally listed in writing, which can mean that any subsequently acquired property won't be governed by the trust and must pass through probate. A will is one way to plan for this contingency. For example, a will might direct such remaining property to go into an existing trust.
Yet an attorney that focuses on estate planning knows that much more than property is at stake in planning for the disposal of an estate and an individual’s end-of-life considerations. Not surprisingly, two documents addressing medical and health concerns -- a living will and a medical power of attorney -- made a recent article’s ranking of four essential estate-planning documents. A living will can address certain end-of-life decisions about health care treatments and procedures, such as resuscitation. Similarly, incapacitation may render an individual unable to make his or her own medical decisions. For that reason, a medical power of attorney can designate another adult to make those medical decisions.
Source: The Wall Street Journal, “Four Estate-Planning Documents Everyone Should Have,” Tom Lauricella, April 20, 2014