So what’s the difference between a Will and a Living Trust and if you have one of them, do you need the other?
In my earlier videos, I explained why having a Will or a Living Trust may not help you avoid probate when you die.
But what exactly is the difference between the two documents?
Both a Will and a Living Trust, aka Revocable Trust, are documents that express your wishes as to what you want to happen to your assets when you die. Who should inherit your assets and upon what terms and who you want to handle your affairs.
Both documents can incorporate tax planning if appropriate and other testamentary trusts for minors, disabled beneficiaries, spouses and other loved ones.
Both documents can be amended at any time so long as you remain competent to do so.
Although Wills and Living Trusts have some similarities, they also have distinctions that are often misunderstood.
For example, a Will only takes effect at death. It is a FUTURE declaration about your intentions.
On the other hand, a Living Trust takes effect IMMEDIATELY so you can incorporate provisions about the management of your assets during your lifetime should you become incapacitated or otherwise become unwilling or unable to manage your financial affairs.
Further, when properly funded, assets owned by a Living Trust avoid probate when you die. Whereas, a Will requires a probate to be effective.
Although more expensive to establish, a living trust is an all-in-one flexible probate avoidance solution when it’s properly funded and maintained.
You should consult with an estate planning professional to determine which estate planning vehicle works best for your situation—a Will or a Living Trust. There are pros and cons to both and one solution does not fit all situations.
Of course helping our clients make this determination is what we specialize in at My Pink Lawyer for our Florida clients.
Schedule your Family Succession Strategy Session to discuss your options with one of our attorneys!