Choosing Between a Trust and Will
A significant number of clients have asked whether a trust or will would be more appropriate for their needs. It’s an interesting question since the answer is always dependent on an individual situation; more often than not the answer is BOTH.
A Florida will is effective in naming beneficiaries of a decedent’s assets but does not always provide the best option. A trust, if drafted appropriately, can accomplish various other goals not obvious to the testator at first glance.
These major factors should be considered when drafting a complete and effective estate plan:
1. If privacy is important to you as you distribute your assets, then a Florida trust is the more appropriate option. A will is not a private document, so it can be acquired and looked at by anyone. A trust is a private document that is not publicly available.
2. If you expect that you may have problems with creditors in the future, then a will probably cannot protect your assets. A precise and correctly worded trust can protect your assets for future generations.
3. Although a will can effectively distribute assets after death, it usually is a time-consuming endeavor. A will must pass through probate before your beneficiaries receive their inheritances. When assets are transferred to a trust prior to death, those assets generally can be distributed by the trustee almost immediately.
4. A properly written trust also allows for the trustee to immediately oversee your financial affairs with respect to assets in the trust if there are incapacity issues. By choosing a will, a Durable Power of Attorney must also be drafted to provide the same benefit.
5. Although the upfront costs of drafting a will are generally less than drafting a trust, the long term costs of administering the will through probate typically overtake trustee costs. In addition, a trust is more likely to hold up better in court in the event of a contest proceeding.
This list is not exhaustive, but it highlights some of the basic estate planning options available to you. If you decide to create a living trust for your assets, it is always a good idea to have a Pour-Over Will drafted as well. In the event you forget to transfer some assets prior to your demise, this instrument will transfer those assets to the trust. If you are still unsure about how to make this decision, it is important to consult an estate planning attorney to determine which method better addresses your goals.
mage courtesy of freedigitalphotos.net by Stuart Miles
Joseph T. Zebrowski, Esq. is a passionate, community-involved professional and company liaison who is leading the development of the estate planning and wealth management division of LaBovick Law Group.