If I have a will, why would I need a trust?

The short answer is, to avoid probate and excessive paperwork for your heirs. If you have a will there may still be items of property that you have that will not automatically transfer to your heirs. Cars are a common item as are bank accounts, stocks that are not in an IRA basically anything without a named beneficiary. If these assets exceed $40,000 you will have to go to probate because you will not qualify for what is called a small estate certificate.  Yes, it is possible to co-own some of these items with an heir, particularly with a spouse but that can have negative consequences. Their can be estate tax and gift tax ramifications. Furthermore, while both parties are alive the asset is available to any creditor that has suffered default by either party. This may be a particular problem if you are single and contemplating joint ownership with a child. Also are you going to try to give to several heirs equally? If so how can you be sure that equality is possible if one child gets a car whose value is fluctuating while another child gets a bank account whose value is fluctuating. You get the idea.

If one has a trust however, one can also have what is referred to as a “pour-over” will. This will will transfer all such assets into the trust upon death where they can be distributed in accordance with the terms of the trust. You will be told to “fund your trust” while you are still alive, meaning you will put many assets – almost everything potentially subject to probate into the trust. However, the pour-over will can take care of the rest.