Why you need a will in addition to a revocable living trust
Dear Jonathan: I recently updated my estate planning, which included a new will, as well as a revocable living trust. I decided to go with the trust because I want to make sure that my estate is not probated at my death. I recently read that if all of your assets avoid probate, you don’t need to have a will because the will only controls assets you have to probate. Is this true? If so, why did my attorney insist on me preparing a will along with my trust?
Jonathan says: The article you read is correct in that a will only controls the disposition of assets that are known as “probate assets.” Probate assets are assets titled in a decedent’s sole name and which are not payable or transferred at death to a beneficiary or subject to any other type of beneficiary designation. If there are no probate assets in a decedent’s estate, there will be no estate to probate, making a last will and testament in that case unnecessary. (However, even though there are no assets to probate, a will might be important for other reasons though such as the naming of a guardian and conservator of minor children.)
Even though a will is unnecessary if there is no estate to probate, your attorney was correct in having you prepare one because there is no guarantee that at the time of your death there will be no probate estate. In other words, even if you have successfully retitled all of your assets to your trust so that if you died today there would be no estate to probate, there is no guarantee that that will be the case five or ten years down the road.
Over that span of time, you might acquire new assets which you title just in your name, and in that event, those assets will need to be probated when you die. If that happens, you will want to have a will in place to direct those assets to your trust upon the completion of probate. The type of will that would be created in conjunction with a revocable living trust is known as a “pour over” will because upon the completion of probate it “pours over” the assets that were probated to the trust. If you fail to leave a will and you have a probate estate, then upon the completion of probate those probated assets will not end up in your trust but instead will pass to those individuals directed by state law and not by you. Consequently, it is always a good idea and it is standard practice to prepare a will in conjunction with a revocable living trust.
Dear Jonathan: I named my daughter as my agent on my financial durable power of attorney and as my patient advocate under my health care power of attorney. We had a recent falling out and I no longer want her to act in those capacities. How do I get her off?
Jonathan says: If your current financial and health care durable power of attorneys name an alternate agent and patient advocate to act in the event your daughter is unwilling or unable to act for you, then you could ask her to resign as your agent and patient advocate which would allow the alternate agent and patient advocate named to step into her shoes as your agent and patient advocate.
In order to make this work, your daughter will need to resign in writing as your agent under the durable power of attorney and as your patient advocate under the health care durable power of attorney. Once that is done, that will elevate your alternate agent and patient advocate to your primary agent and patient advocate. When it comes time for your alternate agent and/or patient advocate to act on your behalf, he or she will need to present your daughter’s resignation to the third party he or she is dealing with as evidence that he or she is authorized to act on your behalf.
If you have not named an alternate agent and/or patient advocate in your current documents, then those documents will no longer be viable if your daughter resigns because there is no one else to act in her place. Consequently, you will be required to prepare new documents.
Also, if your financial and health care durable power of attorneys are more than a few years old, you might be better served to prepare new documents anyway. The newer the document is, the more readily acceptable it is to third parties. In addition, with new documents you would no longer need your daughter to resign because she would not be named in the new documents as your agent and patient advocate.
Further, in addition to being able to name a new agent and patient advocate to act for you, you can name as many backups as you want which will assure the viability of those documents in the event the agent or patient advocate who is supposed to act for you is unable or unwilling to do so when the time comes.
I recommend that you meet with an estate planning attorney in your area for the purpose of reviewing your current documents so that he or she can recommend the best way for you to accomplish your purpose of removing your daughter as your agent and patient advocate. Good luck.
Jonathan J. David is a shareholder in the law firm of Foster, Swift, Collins & Smith, P.C., in Grand Rapids, Mich.