Often we will speak with Clients about their estate planning needs and discover that there are major misconceptions about what is necessary. When it comes to estate planning, there are two documents that stand out as the most important: the will and the trust. Both serve different purposes, but they both play a crucial role in ensuring that your assets are distributed according to your wishes after you pass away. In this blog post, I will be discussing the differences between a will and a trust using Florida law as a reference.
FLORIDA LAST WILL AND TESTAMENT
A will, also known as a last will and testament, is a legal document that outlines how you want your assets to be distributed after you pass away. It also allows you to appoint a guardian for any minor children and name an executor to handle the distribution of your assets. In Florida, according to Florida statute 732.502, a will must be in writing and signed by the testator (the person creating the will) and two witnesses. It must also be made by someone who is 18 years of age or older and of sound mind. A will can be changed or revoked at any time as long as the testator is of sound mind and not under duress. A will provides for the distribution of your assets through a Florida Probate proceeding. If you have a will, your Estate still goes through probate but by creating a Will you are changing the distribution of the estate from the default rules of succession and you are nominating the person who will be handling the case ( the Personal Representative).
WHAT IS A FLORIDA TRUST?
On the other hand, a trust is a legal document that allows you to transfer ownership of your assets to a trustee, who will then manage and distribute the assets according to the instructions outlined in the trust. A trust can be set up during your lifetime (inter vivos trust) or after your death (testamentary trust). One of the biggest advantages of a trust is that it can avoid probate, which is the legal process of distributing a person’s assets after they pass away. In Florida, probate can be a lengthy and expensive process so setting up a trust can save both time and money for your beneficiaries.
Another advantage of a trust is that it can provide more privacy than a will. A will becomes a public document once it is filed with the court, whereas a trust remains private. This can be particularly beneficial for those with high-profile or high net-worth. Or if you simply don’t want family members to know the division of your assets upon your death.
A trust can also provide more flexibility and control over your assets than a will. For example, you can set up a trust for a specific purpose, such as providing for a child with special needs or for charitable giving. You can also set up trusts to hold assets for a certain period of time, such as a trust for a child that would distribute assets when the child reaches a certain age. Another good example is that a Trust can become irrevocable upon the death of a spouse which then allows for blended families to preserve distribution to their descendants (if for example the step children, the children of the surviving spouse, were to try to take everything).
Another difference between a will and a trust is that a will only takes effect upon death, while a trust can take effect immediately upon creation. This means that if you create a trust, the trustee can begin managing and distributing assets immediately, even while you are still alive. Additionally, you can also make changes to a trust while you are alive, whereas a will can only be changed or revoked by the testator before death as outlined in Florida statutes. By being able to take effect immediately you can use a trust similar to a power of attorney in the sense that once the grantor loses capacity the trustee can step up to manage financial affairs etc…
So, which one is right for you? The answer ultimately depends on your individual needs and circumstances. A will is generally a simpler and less expensive option and is typically sufficient for those with a smaller estate. However, if you have a larger estate, complex financial needs, or privacy concerns, a trust may be a better option. It’s also worth noting that many people use both a will and a trust together in their estate plan. A common thing is a “pour over” will that provides all Estate assets into a Trust.
In conclusion, a will and a trust are both important estate planning documents, but they serve different purposes. A will outlines how you want your assets to be distributed after you pass away, while a trust allows you to transfer ownership of your assets to a trustee and allows that designated person to manage for some time after your death.
Understanding the differences between a will and a trust is crucial for effective estate planning. If you have any questions or concerns about your own estate plan, don’t hesitate to reach out to a qualified estate planning attorney. At Zoecklein Law, our team of experienced attorneys are ready to help you determine which document is best for your individual needs and guide you through the process of creating a will or trust to protect your family.
- Brice Zoecklein, Esq.
Disclaimer: The information contained in this blog/website is for informational purposes only and provides general information about the law but not specific advice. This information should not be used as a substitute for advice from competent legal counsel as laws change and the facts in your specific case need to be analyzed.