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Wills and Trusts are two Very Different Kinds of Documents Used in Estate Planning

05/17/2017

Everyone Needs a Will, but not Everyone Needs a Trust. Knowing the Difference Will Help You to Understand What You Need Knowing the Difference Will

A will is the cornerstone of an estate plan. It’s the legal document by which an individual instructs how property should be distributed among heirs, as explained by WMUR in “Money Matters: Wills vs. Trusts.” A will must be processed through the probate court system, which is how your affairs will be concluded after all debts have been paid. Your will includes the name of your executor in Florida it's called Personal Representative. That’s the person who is in charge of making sure that your wishes, as expressed in the will, are fulfilled.

On the other hand, a trust is a legal document and the grantor is the person who creates the trust. The grantor decides what assets are going to be included, selects the trustee and chooses beneficiaries. The trustee manages the property in the trust and protects the assets for the beneficiary. The trustee distributes assets according to the trust’s provisions.

The grantor can be the trustee, and if it’s you, you need to name a successor trustee, in case you are unable to function as trustee. The beneficiary can be you during your lifetime and then your spouse, children, or friends at your death. The trust also directs when and how the assets are to be distributed to the beneficiaries.

For a trust to function properly, you’ll need to transfer the title of assets to the trust. For example, your brokerage account can be transferred into a trust account, and IRAs and 401(k) s can name the trust as the beneficiary.

Here are some significant differences between wills and trusts:

  • Will are public records, but trusts are usually private;
  • You must transfer assets to your trust for it to work, while you’re alive. This is not the case with a will;
  • A trust can manage assets while you’re incapacitated, but a will only works at your death;
  • With property in more than one state, you might be able to avoid probate in each state by placing all of the property in a trust; and
  • You can designate a guardian for your minor children or dependents in a will, but not a trust.

Depending on the complexity of your estate, including its size, you may find that you need a will and a trust, or several different types of trusts. An estate planning attorney will be able to help you identify what, if any, trusts, are needed to protect your family.

Do you live in Miami-Dade, Broward, or Palm Beach counties in Florida? Laws are constantly changing-- has your estate plan been reviewed in the last 2-3 years? Call me (954-888-1747) right away for peace of mind. I can help!

  • My practice is exclusively estate planning and probate,
  • I have prepared numerous estate plans in 16 years of practice,
  • I have administered estates and trusts through Probate all over Florida,
  • I am a Certified Financial Planner Professional™, and
  • I am here for YOU today and there for your FAMILY tomorrow.

Reference: WMUR (April 13, 2017) “Money Matters: Wills vs. Trusts”

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Why would we recommend D.T.F.? Several Reasons: Your ability to explain complex estate problems, clearly and patiently; your total lack of arrogance and pretense; a strong feeling that you are motivated by what you perceive is best for your client, rather than what would generate the largest legal fees; finally, and importantly, you are a lovely guy. A.C.
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Two words cannot sum up the entire process of creating my “trust.” I enjoyed your attention to detail, your patience of explaining terms and conditions until I understood, also giving me copies to read and understand. Thank you for your suggestions on what was best for “me” but still allowing me to make my choice. Most of all, thank you for thinking of “me.” Wells Fargo said “you were the best” I cannot deny that. Again thank you very much for everything. Anna is an asset or a compliment to the firm. She is warm and very caring. It was great doing business. Thank you.

P.M.