When people begin Estate Planning, one of the first questions they often ask is:
“Do I need a Will or a Trust?”
It sounds like a simple either/or question, but Wills and Trusts are not interchangeable. They can accomplish different things, and many Estate Plans actually use both.
Understanding the basic differences can make Estate Planning feel much less overwhelming.
It sounds like a simple either/or question, but Wills and Trusts are not interchangeable. They can accomplish different things, and many Estate Plans actually use both.
Understanding the basic differences can make Estate Planning feel much less overwhelming.
What Does a Will Do in Florida?
A Last Will and Testament provides instructions for what should happen to certain property after your death.
Among other things, a Will can identify the people or organizations you want to receive property through your Estate and name the person you want to serve as your Personal Representative.
Florida law also has specific requirements for properly executing a Will. Generally, the Will must be in writing, signed by the person making it, and witnessed by at least two attesting witnesses in accordance with Florida law.
But there is one very important misconception to clear up:
A Will does not automatically avoid Probate.
A Will is actually an important document within the Probate process. Probate is the court-supervised process used to identify and gather a deceased person’s assets, address applicable debts and expenses, and distribute the remaining assets to beneficiaries.
So having a Will can provide important instructions, but it does not necessarily mean your family will avoid Probate.
What Is a Revocable Trust?
A Revocable Trust, sometimes called a Living Trust or Revocable Living Trust, is another Estate Planning tool.
Unlike a Will, which operates at death, a Revocable Trust can hold and manage property during your lifetime.
The person creating the Trust is commonly called the settlor or grantor, and the person responsible for managing Trust property is the Trustee. The person creating a Revocable Trust can generally serve as the initial Trustee and designate a Successor Trustee to take over when appropriate.
A Revocable Trust can also provide instructions for how Trust assets should be managed and ultimately distributed after death.
Does a Trust Avoid Probate?
This is where an important detail comes in:
Creating a Trust and funding a Trust are not the same thing.
For a Revocable Trust to accomplish its intended purpose for particular assets, ownership and beneficiary arrangements need to be coordinated appropriately.
For example, certain real estate, accounts, or investments may need to be transferred or titled to the Trust. Assets that are not properly transferred to the Trust may still be subject to Probate.
The Florida Bar specifically emphasizes that funding the Trust is critical to using a Revocable Trust to avoid Probate for Trust assets.
Simply signing a Trust agreement does not magically move everything you own into it.
Will vs. Trust: What's the Difference?
Here is a simple way to think about some of the differences:
Will | Revocable Trust |
Provides instructions that take effect at death | Can operate during your lifetime and after death |
Can name beneficiaries for property passing under the Will | Can provide for beneficiaries of Trust property |
Can nominate a Personal Representative | Names a Trustee and Successor Trustee |
Does not automatically avoid Probate | Properly funded Trust assets generally can avoid Probate |
Becomes relevant to administration after death | Can provide for management of Trust assets during incapacity |
Does not itself hold title to your property | Can own property transferred to the Trust |
A Trust can also provide continuity in managing Trust assets if the person who created it becomes incapacitated. The Florida Bar identifies this as one potential advantage of Revocable Trust planning.
If I Have a Trust, Why Would I Still Need a Will?
This surprises a lot of people.
Having a Revocable Trust does not necessarily mean you no longer need a Will.
Estate Plans involving Revocable Trusts commonly include what is known as a Pour-Over Will.
Why?
Because not every asset may make it into the Trust during your lifetime.
A Pour-Over Will can direct certain Probate assets remaining in your individual name at death into the Trust, where they can then be administered according to the Trust’s terms. The Florida Bar notes that incompletely funded Trusts can result in both Probate Administration and Trust Administration being necessary.
That’s another reason we don’t usually think of the question as simply:
Will OR Trust?
The better question is:
What combination of Estate Planning tools makes sense for your circumstances?
Does Everyone Need a Trust?
Not necessarily.
A Revocable Trust can be a useful Estate Planning tool, but that doesn’t mean every Florida family needs one.
The appropriate plan depends on factors such as:
- What you own
- How your assets are titled
- Your family circumstances
- Whether you own real estate
- Your goals for beneficiaries
- Whether you have minor children
- How you want assets managed
- Your concerns about incapacity
- Your overall Estate Planning goals
A relatively straightforward Estate Plan may look very different from a plan involving multiple properties, blended families, minor beneficiaries, business interests, or more complicated distribution wishes.
A Trust Is More Than a Document
One of the biggest mistakes families can make is thinking the process is finished as soon as the Trust is signed.
A Trust needs to work together with the rest of the Estate Plan.
That may involve reviewing deeds, account ownership, beneficiary designations, and other assets to determine how they fit into the overall plan.
Florida’s Trust Code recognizes several methods for creating a Trust, including transferring property to a Trustee or an owner declaring that identifiable property is held as Trustee.
That is why Estate Planning isn’t simply about collecting documents.
It’s about making sure those documents and your assets work together.
Will or Trust? Start With Your Goals
You don’t need to know whether you need a Will or a Trust before meeting with an Estate Planning attorney.
That’s part of the planning process.
A good place to start is with questions such as:
What do I own?
Who do I want to protect?
Who would I trust to handle things for me?
What would I want to happen if I became incapacitated?
What do I want to happen after I’m gone?
From there, an Estate Plan can be designed around your family, your assets, and your goals.
At Law Office of Lori Vella, we help Florida families understand their options and create Estate Plans designed for their individual circumstances.
Contact us to learn more about Estate Planning in Florida.
This article is for general informational purposes only and is not intended as legal advice.
Lori Vella is an Estate Planning and Business Attorney. She works virtually throughout Florida and New York, but has her home office in Tampa, Florida. She is mom to a little boy which ignited the passion for helping other families. She and her son enjoy car rides, playgrounds and taking mini-adventures. They also have an organic garden that surprisingly yields vegetables. Lori considers herself well-versed in Seinfeld and welcomes any trivia!
Disclaimer: The Law Office of Lori Vella’s website contains general information directed to Florida residents. This firm does not intend to give legal advice through its pages and/or blog. If you need legal advice, we encourage you to find an attorney licensed in your state. This language on this website does not create an attorney-client relationship between you and this firm.