FORBES - Most estate plans have both a will and one or more trusts. Usually, one is more important than the other and serves as the foundation of the estate plan with the majority of the estate passing through it.
You must decide the role each vehicle will serve in your estate. One basic choice is to own most assets in your name and determine their distribution through your will. The alternative is to have a revocable living trust own most of your assets and have the terms of the trust agreement determine how assets are distributed. The best choice for one person might not be best for another.
An important difference between a will and a trust is property subject to a will goes through the probate process while property that was owned by a trust when a person passed away avoids probate.
Probate’s major disadvantages are its well-known cost and the delay it causes in distributing the estate. In some states it can be costly and expensive for even small estates to go through probate. Each state is different and it is best to check with your estate planner about the local process before determining how important it is to avoid probate. Specific to Florida, probate has been known to be onerous and a long procedure through the courts, which is open to viewing by the public.
A will is more likely to be challenged than a trust. Trusts rarely are challenged, partly because their details are not public. Also, the rules for challenging wills are well-established, while there is less law concerning challenges to trusts.
With a trust, you must follow the legal formalities of the trust. Be sure to name the trust as legal owner of property and manage it as the trustee. That means deeds to real estate must be reissued in the trust’s name. Titles to vehicles and some other assets must be reissued. Names on financial accounts might have to be changed.
Some attorneys believe trusts are less likely to be updated. They say people know when a will needs to be updated but often incorrectly believe a trust does not need to be revisited.
A living trust at least theoretically provides for a smoother transition of management and ownership of property.
With a trust you initially serve as trustee and manage the property. If you become disabled or pass away, the successor trustee, or trustees, you named in the trust agreement automatically takes over management of the property. After you pass away, the trust property is managed and distributed according to the terms of the trust. The courts are not involved.
Every estate should have a will and is likely to have at least one trust. The issue is which vehicle you use to transfer the bulk of your wealth to the next owners.
Ledbetter Law Group focuses on educating our clients and helping them make their own decisions to determine the best fit for the clients estate planning goals, including cost, efficiency, privacy, tax savings, assets & creditor protection, "avoiding the in-laws", and more.
If Ledbetter Law Group is already assisting you with your estate plan, be sure to review your estate plan yearly or ask about our Lifetime Peace of Mind Program.
If Ledbetter Law Group is not already assisting you, please contact our team to schedule a free consultation today, (941) 256-3965.
