17 Aug Will vs. Trust in South Carolina: Why You May Need Both

One of the most common estate-planning questions we hear is: Do I need a will or a trust?

For many people, the answer may be both.

At Patterson & Williams, we often recommend that clients consider a trust-based estate plan. A trust can offer privacy, provide continuity if you become incapacitated, and allow a successor trustee to begin managing trust assets after your death. But that doesn’t mean a will is unnecessary—or that a trust is right for everyone.

In fact, a trust and a simple will often work together as part of the same estate plan.

What’s the Difference Between a Will and a Trust?

A will provides instructions for property passing through your probate estate after your death. It also allows you to nominate a personal representative to administer your estate.

For parents of minor children, a will has another particularly important purpose: it allows you to nominate the people you would want to serve as guardians for your children.

A revocable living trust is created during your lifetime. Appropriate assets can be transferred to the trust, and you can generally continue to control and use them while you are living and able to manage your affairs.

The trust also establishes who can step in to manage trust property if you become incapacitated and who will manage and distribute it after your death.

Here’s a simple way to think about some of the differences:

Consideration	Will	Revocable Living Trust
Directs distribution after death	Yes, for property passing under the will	Yes, for property governed by the trust
Nominates guardians for minor children	Yes	No—a will is generally used
Provides for management during incapacity	Limited	Yes, for trust property
Administration is generally private	No	Yes
Requires assets to be transferred or funded	No	Yes
Can be part of the same estate plan	Yes	Yes

That last row is important. For many families, the decision isn’t will versus trust. A well-designed estate plan can use both.

Why Do We Often Recommend Considering a Trust?

For many of our estate-planning clients, we recommend considering a trust-based plan because of three primary benefits: privacy, continuity, and incapacity planning.

A will is generally administered through probate, which involves the court. A trust, on the other hand, is generally administered privately outside that same probate process.

A properly structured and funded trust can also allow a successor trustee to begin managing trust property after death without first having a personal representative appointed to administer those assets through probate.

Estate planning isn’t only about what happens when you die, either. A trust can establish who will manage trust property if you become unable to manage it yourself.

These benefits aren’t limited to extremely wealthy families. Whether a trust makes sense depends on your assets, family circumstances, and goals—not simply your net worth.

“Isn’t a Trust More Complicated?”

This is a concern we hear frequently.

Some people initially resist creating a trust because they expect it to be too expensive, complicated, or paperwork-intensive.

A trust does require some additional planning. Signing the trust agreement is only one step. You also need to determine which assets should be transferred into it—a process commonly called funding the trust.

That’s particularly important for homeowners.

Creating a trust does not automatically change ownership of your home. If your estate plan calls for real estate to be held in the trust, the deed and trust need to work together.

For homeowners in Hilton Head Island, Bluffton, and throughout the Lowcountry, this is an important intersection between estate planning and real estate law.

So the better question isn’t simply, “Is a trust more work?”

It’s whether the benefits are worth the additional planning for your particular circumstances.

Why Would I Need a Will If I Already Have a Trust?

This is where the relationship between the two documents becomes especially important.

When we prepare a trust-based estate plan, we generally also prepare a simple will to work alongside the trust.

Think of the trust as the primary vehicle for managing and ultimately distributing the assets that have been placed in it. The simple will serves as an important backup.

If you own property at your death that was not properly transferred to the trust, the will can provide instructions for how certain probate property should ultimately be handled. Depending on the estate plan, the will may direct appropriate assets into the trust so they can be distributed according to the trust’s terms.

The will also accomplishes something particularly important for parents of minor children: it allows them to nominate guardians.

So creating a trust doesn’t necessarily mean you are replacing your will. Instead, the documents can have different jobs within the same estate plan.

The trust handles the assets properly placed in it. The will provides an important backup and addresses matters that still require a will.

That’s why, for many clients, the better question isn’t “Should I have a will or a trust?”

It’s “How should my will and trust work together?”

Is Avoiding Probate Always Better?

Avoiding probate is frequently presented as one of the primary advantages of creating a trust. For many clients, privacy and the ability to administer trust property outside probate are important benefits.

But court involvement isn’t necessarily a disadvantage in every situation.

Some clients actually value the oversight provided by the probate process.

For example, you may know who you want to serve as your personal representative but have concerns about whether that person will faithfully follow your wishes or properly administer the estate. The formal procedures and court oversight involved in probate may provide additional reassurance.

A trust generally offers greater privacy and allows the trustee to administer trust property outside that same probate process.

Neither approach is universally better. The important question is which type of administration makes the most sense for you and your family.

Will, Trust—or Both?

Instead of starting with “Which document do I need?” consider some of the larger questions:

• How important is privacy to me?
• Who should manage my affairs if I become incapacitated?
• Do I have minor children for whom I need to nominate guardians?
• Am I comfortable with my estate going through probate?
• Do I value court oversight of the person administering my estate?
• How is my home and other real estate titled?
• How do I want my assets managed and distributed after my death?

Your answers can help determine whether a will-based plan, a trust-based plan, or a combination of the two is appropriate.

For many families, a trust and a simple will aren’t competing choices. They are complementary parts of a larger estate plan.

Frequently Asked Questions

Do I need both a will and a trust in South Carolina?

Many trust-based estate plans also include a will because the documents serve different purposes. A will can provide a backup for certain property outside the trust and can also be used to nominate guardians for minor children.

Does a living trust avoid probate in South Carolina?

Assets properly transferred to and governed by a trust generally do not pass through probate in the same manner as assets distributed under a will. Simply signing a trust, however, does not automatically transfer your property into it. Properly funding the trust is an important part of the planning process.

Are trusts only for wealthy families?

No. Net worth is only one consideration. Privacy, incapacity planning, real estate ownership, family circumstances, and how you want your assets administered can all influence whether a trust makes sense.

Talk With Patterson & Williams About Your Estate Plan

A will and a trust are tools. The more important question is how those tools should work together to protect your family and accomplish your goals.

Patterson & Williams helps individuals and families in Hilton Head Island, Bluffton, and throughout the Lowcountry develop estate plans based on their property, family circumstances, and priorities.

If you’re wondering whether you need a will, a trust, or both, contact Patterson & Williams to discuss your estate-planning options.

 

Lauren Williams is an attorney with Patterson & Williams, P.A. in Hilton Head, SC.  She can be reached at (843) 341-9300 or lauren@pwpa.law.

This post has been prepared by Patterson & William, P.A. for informational purposes only and does not constitute legal advice.  Information or interaction on this page should not be construed as establishing a client-attorney relationship or as legal advice.  For advice about your specific situation, please consult one of our attorneys.