Q&A: Wills & Trust

Test Your Knowledge of Wills and Trusts

Ever wonder whether you should distribute your assets through your will alone or in conjunction with a living trust? Either way, it would be wise to be well informed about your options. Complete the following True or False questions to see how well you know the similarities and differences between these two helpful tools.

Creating a revocable living trust is an easy do-it-yourself project. True or False?

False. It is important to consult an attorney who is familiar with estate planning. Compile a list of your assets including stocks, real estate and other assets, and your attorney can help you figure out which assets you should place in the trust. 

By using a living trust, you will reduce or avoid probate fees. True or False?

True. Assets in revocable living trusts are not generally subject to probate so they help minimize the expense in that process. They also allow assets to be distributed faster, provide protection in the event of disability and can be changed during your lifetime without the formalities of a will. 

You must appoint another person or entity to act as trustee of the living trust when it’s established. True or False?

False. You may act as trustee and manage the property in the trust during your lifetime. You can also name another person as co-trustee in case you no longer wish to or if you are unable to act in this capacity.

A living trust will not reduce or avoid estate taxes at death. True or False?

True. Having a revocable living trust will not reduce estate taxes at your death. Your gross estate will include the value of the assets in the trust at your death. But if your estate is over the exemption amount ($13.61 million per individual and a combined $27.22 million for a married couple for 2024) and is subject to tax, the trust can direct a distribution to charity at your death and your estate will be entitled to a charitable deduction.

Both a living trust and a will are public records that can be viewed by anyone. True or False?

False. While a will is a public document, living trust transfers are private and are not subject to court reviews. Consider that you can include a pour-over will in your plans so the other assets in your estate pass to your living trust and your bequests remain private.

How did you do?

Whether you knew all the answers or learned something new, it should be clear that wills and living trusts, although very different, can work well together in your preparations. Please contact your advisor to help with questions on your estate plans. For more information about how to leave the Boys and Girls Clubs of East County in your estate plans, call 619-440-1600 and ask for our Executive Director, Forrest Higgins.