What’s the Difference Between a Will and a Trust?
Many people have heard the terms “will” and “trust,” but it is often not clear what the differences are between the two. Both are useful estate planning documents that help you distribute your assets in a way that YOU control, rather than the state. However, they have different advantages and disadvantages, and can serve different purposes. They also can work together to create a comprehensive estate plan.
A major distinction between a will and a trust is that a will takes effect only after you die, but a trust is in force as soon as you create it, so can bring benefits while you are still alive.
- A will is a foundational document that directs who will inherit your property only upon your death. and it assigns a legal representative to carry out your wishes. You can override detault state inheritance schemes and give your property to whomever you choose. A will in Florida must be filed with the court and needs to go through a probate proceeding (with some limited exceptions)
- A trust is a legal arrangement through which one person (or an institution, such as a bank or law firm), called a “trustee,” holds legal title to property for another person, called a “beneficiary.” A trust usually has two types of beneficiaries — one set that receives income from the trust during their lives and another set that receives whatever is left over after the first set of beneficiaries dies. Having a trust enables you to avoid an expensive and time-consuming probate process, helps keep your personal information private, and streamlines the handling of your affairs both while you are alive and potentially incapacitated or disabled, and then when you pass away.
Learn more in our Legacy Wealth Planning workshops – FL Wills & Trusts 101 – What YOU Need to Know! (LINK HERE to registration page?)