Many estate plans contain both a Will and at least one Trust. When a Trust is involved, typically the Will is a pour-over Will. The Will may contain many things, like the designation of guardians, or it may simply “pour-over” any estate property, not already titled in the name of the Trust, into the Trust upon the death of the Testator (creator of the Will).
These two documents, the Will and the Trust, are separate legal documents with specific purposes. They should, however, be drafted as part of a unified estate plan. When they are not, confusion can occur.
A simple way to think of how these conflicts are resolved is “You cannot give away something you do not own.” When an individual creates an estate plan, he owns, or will own at the time of his/her death, certain assets.
When a Trust is involved, the Trust only owns what that individual titles in the name of the Trust. If the Trust document intends for the Trust to own certain property, say a home, but the home is never titled in the name of the Trust, then the Trust does not own it. The assets in the Trust do pass through the probate process.
Likewise, a Will only controls the assets titled in the name of the decedent upon his/her death. If that same house has been properly titled in the name of the previously referenced Trust, then the decedent no longer owns it. A Will has no power to decide who receives a Trust’s assets.
By way of illustration, consider the following example:
Alex has a child from a prior marriage. After the passing of his wife, he creates a Will that leaves his home to his child. Alex then remarries and creates a Trust. He then properly titles the home into the name of the Trust and designates upon his passing that his wife will be given the home. Who wins? The Will provides that the home will go to his child, but he no longer owns the home, the Trust owns the home. A Will cannot give away property the decedent does not own.
Now change the facts.
Assume all the above has occurred, except Alex forgot to title the home into the name of the Trust. Does his now wife get the home? Alex still owns the home, not the Trust. A Trust only controls the property in the Trust. The home would pass to his child pursuant to his Will.
Takeaway
These simple examples do not take into account several other probate law nuances that may come into play (for example, spousal elective share). Rather they are offered to illustrate the concept that “you cannot gift what you do not own,” as a way of thinking about how conflicts between testamentary documents would be resolved. These examples also point out that in the event conflicts exist in your estate plan documents, costly litigation may ensue. Nobody wins when an estate plan is poorly drafted. If you have had changes in life circumstances or need assistance in creating or revising your estate plan, Contact CASHMAN LAW today for a free consultation to see how we might help you plan for your future.
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