In our 20 years of experience helping South Floridians with their Estate Planning needs, we have learned that people have multiple questions about Estate Planning, specifically, “What is the difference between a Will and a Trust? ”
Although their functions overlap, these Estate Planning tools can be a crucial component of a robust Estate Plan. It’s best to determine if you need both a Will and a Trust with the assistance of an experienced attorney who can recommend the right Estate Planning tools for your unique Estate Plan.
This blog, from a seasoned Elder Law and Estate Planning Attorney, explains the important distinctions between a Will and a Trust and how a knowledgeable attorney can help you implement a well-designed Estate Plan. Continue reading to discover more, then contact us at (561) 955 8515 to schedule a free consultation.
Creating a Will Ensures Your Wishes Are Fulfilled
A Will is a foundational tool in your estate plan. This legal document determines the distribution of your assets after you pass away – from finances and personal belongings to real estate and more. If you have minor children, you can designate a guardian for them in your will.
When drafting Wills, exercise precision because once you file a Will, no changes can be made. Married couples should create separate wills for each spouse to fully protect both interests. The creator of a Will, known as the Testator, has the power to name beneficiaries, distribute assets, and express specific final wishes. Whether it’s burial or cremation arrangements, nobody knows your desires better than you.
In your Will, you must designate a Personal Representative who will handle the Probate and Estate Administration duties after you pass away, with the assistance of a Probate Attorney. Your Personal Representative must be a reliable adult living in Florida or someone with a close familial relationship if they live outside the state.
How a Will Streamlines the Probate Process in Florida
Probate is the legal process overseen by the Court to settle a deceased person’s estate. It involves several critical steps:
- Identifying all the assets left behind by the deceased.
- Publishing a Notice to Creditors, giving them a chance to make their claims.
- Settling any debts owed by the deceased, based on claims filed by creditors.
- Distributing the remaining assets to beneficiaries according to the Will’s instructions.
You can update your Will anytime during your lifetime, as long as you possess the legal capacity. Relationships change, desires evolve, and circumstances shift. Don’t hesitate to make adjustments to ensure your Will reflects your current wishes and circumstances.
When someone passes away without a legally valid Will, their assets usually go to family members based on Florida’s intestacy laws. However, these laws may not align with the wishes of the deceased, rendering them unable to leave part of their assets to charity (as they could have done with charitable gift planning) or provide a larger share of their property to specific family members.
Remember, life is full of changes. That’s why we recommend regularly reviewing your Will and making any necessary adjustments. As long as you’re mentally capable, you can update your Will to reflect changes in relationships, family dynamics, and your desires.
Defining a Florida Trust
Unlike a Will, a Trust is a powerful legal tool that allows you to protect, grow, and transfer your assets with ease. Once you place your assets in a Trust, the Trust becomes their legal owner.
A Trust involves three key players:
The Grantor: You, the individual who establishes the trust and sets the rules.
The Trustee: The trusted person responsible for managing and administering the trust.
The Beneficiary: The individual entitled to enjoy the benefits of the trust’s assets.
In some cases, one person can fulfill all three roles, giving you full control over your financial destiny. Whether it’s organizing your estate, protecting your wealth, or ensuring a smooth transfer of assets, your Florida Estate Planning Attorney can tailor it to your needs.
Types of Florida Trusts
Florida state law offers various Trust options.
Living Trusts: Retain Control, Ensure Continuity
With a Living Trust, you can maintain full control of your assets during your lifetime. Rest easy knowing that upon your passing, a successor Trustee will seamlessly step in to manage and distribute your assets according to your wishes.
Special Needs Trusts (SNTs): Empower Those in Need
For individuals dealing with medical conditions that may hinder their ability to handle finances, Special Needs Trusts provide a lifeline. By designating someone else to oversee their assets, individuals can focus on their well-being, medical care, and quality of life.
Dynasty Trusts: Secure Your Family’s Future
Designed for the ultra-wealthy, Dynasty Trusts offer unparalleled control over family finances. Safeguard your wealth and ensure a smooth transfer of money to future generations, solidifying your family’s financial security for years to come.
Revocable vs. Non-Revocable Trusts in Florida
Florida state law recognizes two types of Trusts: Revocable and Irrevocable.
Revocable Trusts allow the person who created it (the Grantor) to make changes or even cancel the trust completely during their lifetime, giving them flexibility and control over their assets.
However, a Revocable Trust doesn’t automatically avoid Probate, which is still necessary for assets not included in the Trust when the person passes away. Many people don’t realize this and fail to fully fund their Trust, which means Probate may still be required.
On the other hand, Irrevocable Trusts are not easily dissolved. While there might be some rare instances where changes can be made or the Trust can be dissolved, it usually involves a more complex legal process requiring a court petition.
One key difference between Revocable and Irrevocable Trusts is that the Grantor and Trustee are separate individuals in Irrevocable Trusts. The Trustee manages the assets in the Trust, while the Grantor and beneficiaries typically don’t have direct access to the Trust assets.
The Siegel Law Group in Boca Raton: Your Florida Estate Planning Attorney for Your Will or Trust
When engaging in the Estate Planning process, you may wonder whether you need a Will and a Trust. While everyone needs a Will, a Trust may not be necessary for every individual.
For those with dependents or beneficiaries with special needs, Trusts can be particularly valuable. Wealthy individuals often use Trusts to pass on their assets to future generations. For others, deciding whether to establish a Trust or rely solely on a Will depends on personal preferences. Some individuals choose to place their assets in a Trust to potentially simplify the distribution process after their passing. Regardless, a Trust cannot fulfill its intended purpose if the person creating it does not place all assets into it and forgets to make the document easily accessible to their designated successor(s).
Healthy individuals with moderate assets may find that a Will alone is sufficient. In Florida, certain assets, such as jointly owned bank accounts or those with designated beneficiaries, do not require Probate. Married individuals often hold most assets jointly with their spouse.
Concerning the creation of significant legal documents like a Will or a Trust, enlisting the help of an experienced Estate Planning Attorney is vital. With over 25 years of experience, Barry D. Siegel, Estate Planning Attorney and Founder of The Siegel Law Group, P.A., has the knowledge and experience you need to develop a valid and legally binding Will. His attorneys have over 75 years of combined experience and can help you determine whether you need a Trust based on your specific circumstances. Our law firm guides South Florida residents in the creation of Estate Plans designed to protect assets, designate a guardian for minor children, maintain privacy, transfer ownership of property, and make an informed decision on all matters related to your Estate Planning. Contact us at (561) 955 8515 or complete our online form to schedule your free consultation.
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The information in this blog post (“post”) is provided for general informational purposes only and may not reflect the current law in your jurisdiction. No information in this post should be construed as legal advice from the individual author or the law firm, nor is it intended to be a substitute for legal counsel on any subject matter. No reader of this post should act or refrain from acting based on any information included in or accessible through this post without seeking the appropriate legal or other professional advice on the particular facts and circumstances at issue from a lawyer licensed in the recipient’s state, country, or other appropriate licensing jurisdiction.