Understanding The Difference Between A Will Vs. Trust
by Jeffrey Stiller on April 5th, 2021 in Estate Planning Law, Wills, Trusts and Probate
The terms “will” and “trust” are commonly used, but the difference between will vs. trust can often be quite challenging to distinguish and legally complex to execute correctly. As life progresses, the need to plan for the future and prepare for unforeseen circumstances becomes increasingly important. A Last Will and Testament (will) and/or trusts are an integral part of estate planning, and they can often work in tandem to create a comprehensive estate plan for individuals and families. Many estate plans incorporate both wills and trusts. If you are interested in learning more about protecting your financial assets and estate, consider contacting our experienced attorney at Battaglia, Ross, Dicus & McQuaid, P.A. at 727-381-2300 to learn more about your options.
What Is a Will?
A Last Will and Testament (will) is a document that details how property will be handled and distributed after a person’s death, according to Chapter 731 of the Probate Code in Florida. A will involves three main parties:
- The testator: the individual who creates the will,
- The executor: the individual responsible for administering the estate after the death of the testator, and
- The beneficiaries: the people who will receive some asset(s) from the estate.
The executor is typically named directly in the will, but if not, one is assigned by a judge in court. The beneficiaries of the will may object to this, which can complicate and extend the process. This also means that a will automatically becomes a public document immediately after the death of the testator.
It is important to note that wills can include instructions regarding several different legal areas. A will may have incorporated how children under 21 will be cared for, which beneficiaries will inherit the estate, how assets will be disposed of, or even any unique wishes that the testator has. If an individual wishes to have a large sum of money donated to charity, a will has the power to specifically address that choice.
Without having a will in place, your estate will be divided and distributed under Chapter 732 of Florida Intestacy Laws, which focuses heavily on spousal and familial relationships. Failure to have an estate planning document in place can lead to undesired scenarios: for example, the family home may be sold in lieu of going to the desired relative. In order to ensure your wishes are carried out after your death, it is important to consider establishing legal documents that address your specific intentions and wishes.
Advantages of a Will
There are several advantages a will provides including the following:
- Allows the opportunity to name guardians of children under 21.
- The ability to clarify funeral arrangements.
- Wills are easily amenable, as they do not take effect until after death.
- Allows the opportunity to make donations to institutions or charities.
- Easier to execute.
Disadvantages of a Will:
There are disadvantages to a will as well, including the following:
- Subject to probate (court process that includes having a judge distribute assets and follows the specifications outlined in the will)
- Does not maintain privacy after death.
- Can lead to disputes among beneficiaries.
What Is a Trust?
A trust includes any property or assets that are put aside and protected for the benefit of another individual. This property can be anything ranging from land to money to possessions, as long as it holds value. A trust involves three parties:
- The grantor/settler: the person who creates the trust,
- The trustee: the entity that holds legal title to the estate, and
- The beneficiary: the individual who will assume control of the trust in the future.
Under Chapter 736 of the Florida Trust Code, a trust can come in many forms. Some of these include a revocable living trust, irrevocable trust, spendthrift trust, or discretionary trust. The most common is the revocable living trust; this type of trust is able to be changed, revoked, or added onto by the grantor at any time during his or her lifetime. Visiting with an experienced estate planning attorney at Battaglia, Ross, Dicus & McQuaid, P.A. can help you better understand all of your legal options.
Advantages of a Trust
There are several advantages that trusts provide, which include the following:
- Avoidances of the probate process.
- Continuation of management in the event of illness or disability.
- In some cases, trusts can lessen the burden of taxes.
- Maintains privacy after death.
- Protection from court challenges and disputes.
Disadvantages of a Trust:
However, trusts are not always the most beneficial for every person’s estate planning needs. Some of the disadvantages of a trust include:
- A trust is unable to name guardians or caretakers for children.
- The creation of a trust can be complicated and legally complex.
Will vs. Trust: Key Differences
There are a few key differences between a will vs. trust in Florida, including the following:
A will goes into effect only after the death of the individual who created the will (testator). Before the death of the testator, the will is not in effect. This is beneficial because it allows for quick and easy changes to the document. A trust, on the other hand, goes into effect the moment it is created. In that case, unless the trust is a living revocable trust, it cannot be altered.
Probate is a formal legal process wherein a court will prove whether or not a will is valid. This process handles identifying assets, having the property appraised, and paying debts or taxes. Probate begins after the death of the individual and, in some cases, can become time-consuming and burdensome. It is also subject to the court’s rules and deadlines. The ease of probate depends on the time it takes to successfully distribute all assets and property. Only wills must go through the probate process. Trusts are completely private and do not go through the probate process.
Public vs. Private
It is worth mentioning that once a will moves into probate, it becomes a public document. This means that the will can be easily discovered, and therefore, contested by family members, relatives, or anyone with a potential claim on the estate property. A trust, alternatively, is a private document that remains private throughout its lifetime. Therefore, the privacy of a will affords it a greater opportunity to avoid potential disputes among possible beneficiaries.
Contact an Experienced Estate Planning Attorney
Every person has different estate planning needs. The decision regarding a will vs. trust can prove legally complicated and complex. Consider visiting with an experienced estate planning attorney at Battaglia, Ross, Dicus & McQuaid, P.A. at 727-381-2300 to help you better understand all of your options, and ensure your financial rights remain protected for both you and your heirs.