A revocable trust and a will are both legal documents used to manage assets and distribute them upon death. However, there are several key differences between the two.
A will is a legal document that outlines how a person’s assets will be distributed upon death. It becomes effective only upon the death of the person. A trust, on the other hand, is a legal agreement in which a trustee holds and manages assets on behalf of one or more beneficiaries. Trusts can be set up during a person’s lifetime and can provide for the management and distribution of assets both during the person’s lifetime and after his/her death.
Key differences between a trust and a will:
- A will takes effect only upon death, while a trust can be set up during a person’s lifetime.
- A will must go through probate, which is a legal process that can be time-consuming and costly. Trusts typically avoid probate.
- A will only cover assets that are owned in the person’s individual name, while a trust can cover a wide range of assets, including real estate, investments, and personal property.
- Trusts offer more privacy than wills, as they are not a matter of public record.
- Trusts can provide for the management and distribution of assets both during the person’s lifetime and after their death, while a will only covers distribution after death.
Additional Benefits of Using a Trust:
- Asset Protection: Trusts can provide protection for assets from creditors, lawsuits, and other legal claims.
- Estate Tax Planning: Trusts can be used to minimize estate taxes and maximize the number of assets that pass to beneficiaries.
- Special Needs Planning: Trusts can be set up to provide for special-needs beneficiaries, such as children with disabilities, without disqualifying them from government benefits.
- Control Over Asset Distribution: Trusts can be set up to distribute assets over a period of time, rather than all at once. This can be useful for beneficiaries who may not be financially responsible or for minor beneficiaries.
Additional Benefits of Using a Will:
- Simplicity: Wills are generally simpler to create and administer than trusts.
- Cost: Wills are generally less expensive to create and administer than trusts.
- Flexibility: Wills can be changed or revoked at any time by the person creating it, while the person is still alive.
It’s important to note that trusts and wills can also work together — as a will can be used to transfer assets that were not transferred to the trust during the person’s lifetime, and to name guardians for minor children.
Do You Need Legal Assistance To Create a Trust or Will?
While it is possible to create a will or a legal trust without the assistance of an attorney, it is generally recommended to seek legal advice when creating either of these documents. An attorney can help ensure that the documents are properly drafted, legally enforceable and tailored to your specific needs and circumstances.
Attorneys can also help you understand the laws and regulations that apply to your situation and the potential implications of your choices. Additionally, an attorney can advise you on the best way to use a will or a trust in combination with other estate planning tools, such as powers of attorney and living wills.
While it is possible to create a will or a trust without an attorney, it is generally advisable to seek legal assistance to ensure that your documents are properly prepared and that your wishes are carried out.
What Are The Risks If I Don’t Get A Trust Or A Will?
If you do not have a trust or a will in place, it can result in a number of negative consequences. Some of these include:
Lack Of Control Over Asset Distribution
- Without a will or trust, assets will be distributed according to state laws of intestacy, which may not align with your wishes or goals.
Prolonged Probate Process
- Without a trust, assets will likely have to go through the probate process — which can be time-consuming and costly.
Lack Of Protection Of Assets
- Without a trust, assets may be vulnerable to creditors, lawsuits and other legal claims.
Lack Of Special Needs Planning
- Without a trust, it may be difficult to provide for beneficiaries with special needs, such as children with disabilities, without disqualifying them from government benefits.
It’s important to note that everyone’s circumstances are different and it’s important to consult with an attorney or other legal professional to determine the best course of action for your specific needs and goals.
Take Control of Your Future with Professional Estate Planning Services
Trusts and wills are both legal documents that can be used to manage and distribute assets, but they have some key differences. Both have their own set of benefits and can be used depending on each person’s unique situation.
It’s important to consult with an attorney or other legal professional to determine which option is best for your specific circumstances.
If you are in the Orlando, Florida area and are in need of legal assistance with trusts, wills or any other aspect of estate planning, we invite you to contact Cipparone & Cipparone — Your Trusted Orlando Law Firm.
Our experienced attorneys can help you understand the legal options available to you, and can assist you in creating a plan that meets your unique needs and goals. You can reach us by phone at (321) 275-5914 or use our contact form to schedule a consultation. We look forward to helping you plan for the future.
**This blog is for general informational purposes only. Cipparone & Cipparone, P.A. does not distribute legal advice through this blog. As such, this blog does not constitute legal or other professional advice, and no attorney-client relationship is created between the reader and Cipparone & Cipparone, P.A.Tags: Wills