A will and a trust are separate legal documents that typically share a common goal of facilitating a unified estate plan. While these two items ideally work in tandem, due to the fact that they are separate documents, they sometimes run in conflict with one another--either accidentally or intentionally.
By definition, a revocable trust is a living trust established during the life of the grantor, and may be changed at any time, while the grantor is still living. Since revocable trusts become operative before the will takes effect at death, the trust takes precedence over the will, when there are discrepancies between the two.
- A will and a living trust are both part of a comprehensive estate plan, that sometimes are inconsistent with one another.
- When there are conflicts, the trust takes precedence.
- A will has no power to decide who receives a living trust's assets, such as cash, equities, bonds, real estate, and jewelry.
A Trust Is a Separate Entity
From a legal standpoint, a trust is a separate entity from an individual. When the grantor of a revocable trust passes away, the assets in the trust do not enter into the probate process along with a decedent's personal assets.
When a person dies, his or her will takes effect in a legal proceeding called probate, which aims to distribute the deceased individual's property, according to the terms dictated by the decedent's will. But probate does not apply to property held in a living trust, because those assets are not legally owned by the deceased person. In other words, the will has no authority over a trust's assets, which may include cash, equities, bonds, real estate, automobiles, jewelry, artwork, and other tangible items.
Consider the following example: Let's assume a family patriarch named Calvin has two children named Donna and Maxine. Let's further assume that Calvin places his home into a living trust which states that Donna and Maxine are to inherit that house. Several years later, Calvin remarries. But just before he dies soon after, he executes a new will that purports to leave his house to his new wife, Paula. In such a scenario, Calvin would have needed to amend the trust, in order to make the transfer to his wife effective. Consequently, that home becomes the property of Donna and Maxine.
This can be a confusing subject to many individuals, who write wills and expect the stipulations to be carried out without incident. Therefore, it's vital to remember that a revocable trust is a separate entity and does not follow the provisions of an individual's will, upon his or her death. It's prudent to seek the advice of a trust and estate planning attorney, to make sure proceedings go as planned.