It is impossible to predict what might happen in the future. Different estate planning tools permit you to prepare for an event of incapacitation or death and protect loves ones against uncertainty. In this article, you will understand the differences between living trusts and wills.
Living Trust vs. Will in Florida – The Fundamentals
Florida Last Will
A will is the most important estate planning tool. Without a will, it is impossible to know the decedent’s wishes on how his or her estate should be administered and executed upon death. When preparing a will, the testator (the person writing the will) must outline:
- The heirs who must receive the assets held in his or her estate upon death
- How the assets should be distributed to each heir
Another important aspect of wills is the designation of a personal representative. After the testator’s death, the will must be submitted to the appropriate court. The court will verify the validity of the document and determine whether it must go through probate.
During probate, the court will designate a personal representative to administer and execute the testator’s estate. If the testator did not use the will to designate a proper personal representative, the court will designate one based on Florida’s statutory rules.
After being appointed in court, the personal representative must notify all interested parties to the will – including the decedent’s heirs, beneficiaries, and creditors who may have a claim on the decedent’s estate.
The personal representative must follow the provisions in the will to execute the decedent’s estate, which include:
- Identifying, collecting, and inventorying all the assets part of the estate
- Identify the validity of any claims against the estate
- Paying outstanding debts and creditors’ claims
- Objecting to invalid claims against the estate
- Filing tax returns on behalf of the estate
- Represent the estate in litigations or disputes
- Distributing the remaining assets to their rightful heirs and beneficiaries
Florida Living Trusts
A trust is a legal arrangement in which a trustor (person who created the trust) transfers the ownership of assets to a trustee (fiduciary) to benefit one or multiple beneficiaries. A living trust is a revocable trust created during the trustor’s lifetime.
In a living trust, the trustor designates him or herself as the trustee of the arrangement. This way, it is possible to waive nominal ownership over the assets held in trust while retaining control over them.
While a will is only useful in the event of death, living trusts are valuable estate planning tools during the trustor’s lifetime. A revocable living trust can be amended, changed, or even revoked at any time during the trustor’s lifetime.
Once the trustor passes away, the trust becomes irrevocable, and the trustee must distribute the assets held in the trust according to the provisions in the trust instrument. Please note that all assets transferred to a trust are not subject to probate, making trusts a popular solution for probate avoidance.
Once a will is submitted to the court, the document becomes public. Conversely, trusts are not open to the public after the trustor’s death, as they are private legal arrangements.