Wills vs. Trusts: Estate Planning FAQs

If you are getting ready to create or update a comprehensive estate plan, you likely have a number of questions about how to evaluate the efficacy of some of the most popular estate planning tools. The right suite of estate planning documents will always depend on the resources, goals, and priorities of the individual who develops the estate plan – but two of the most widely used tools are the Last Will and Testament (also known simply as a Will) and a Trust (in any of several structures). Some individuals prefer one of these over the other, whereas others may use both together to achieve their desired goals.

If you have questions about Wills vs. Trusts, consider working with an experienced Florida estate planning attorney from Loughlin Law, P.A. to discuss your priorities and get help evaluating estate planning tools that may help you to achieve your long-term goals for securing your legacy and making sure your loved ones will be taken care of after you are gone. We offer free virtual discovery consultations as well as scheduling in-office visits, so call our legal team at 561-677-8384 today to book an appointment to visit with our dedicated team today.

Differences Between Wills Vs. Trusts

In order to understand whether your estate planning goals will be better served by a Will, a Trust, or both, it may be helpful to get an overview of how these documents function. Gaining a better understanding of each of these tools can make it easier to choose between them, or to determine how they may work together to meet your overall estate planning goals.

Wills

A Last Will and Testament is a document in which an individual, known as the Testator, identifies their personal possessions and indicates the beneficiaries they would like to receive their property after the Testator’s death. They also typically use this document to name an Executor to carry out the probate of their estate and ensure that the terms of the Will are fulfilled. Some individuals also use the Will to provide instructions regarding how they would like their physical remains to be disposed of after death; given the time it can take to locate a Will, however, it is also common to use a separate document to indicate one’s preferences for disposition of remains.

Wills are perhaps more widely familiar than Trusts, but their image in popular culture can sometimes lead to exaggerated expectations for how Wills will function and what these estate planning documents can achieve. Even individuals who are aware that the legal requirements for validating a Will depend on the laws of the testator’s state of residence may not fully appreciate the degree to which the terms set out in the Will may be constrained by the Florida Probate Code.

Trusts

A Trust is a legal entity formed for the purpose of owning, or “holding,” assets. The individual who creates and funds a Trust is known as the Trustor or Grantor, and the document that establishes the Trust is known as the “trust instrument.” This document will name a Trustee (sometimes more than one) to manage the assets contained in the Trust and ensure that these are distributed to Beneficiaries, also named in the instrument, in accordance with the terms specified in the founding document. These terms can range from the deceptively simple to the exceedingly complex. Whether the instructions to the Trustee are minimalist or baroque, a Trust may be either revocable or irrevocable; either option presents its own advantages and disadvantages.

Revocable Trust

A Revocable Trust may be altered by its Trustor during the individual’s lifetime. A Revocable Trust offers substantial advantages in flexibility. Because the Trustor retains access to the assets contained in a Revocable Trust, however, this type of Trust does not offer all of the same asset protection benefits, particularly in regard to securing assets against creditors, as the irrevocable type. However, a Revocable Trust can still help to ensure that assets pass directly to the beneficiaries designated to receive them after the Trustor’s death, bypassing the sometimes lengthy and tedious probate process, according to the American Bar Association.

Irrevocable Trust

An Irrevocable Trust offers greater protection to assets as compared to a Revocable Trust. Because the Trustor no longer has the ability to alter the terms of the Trust or withdraw assets at will once the trust instrument has been finalized, these assets are also protected from creditors – even from the federal government, under most circumstances.

Why Is a Will Better Than a Trust?

The ideal suite of estate planning tools to meet your needs will always depend on a combination of your goals and priorities, your assets and resources, and the laws of the state in which the estate plan is designed to take effect. However, a Last Will and Testament is a good fit for most people preparing their estate plans under most circumstances. The Will may be used either alone or in combination with a Trust. Individuals who prefer to rely on one or the other may choose a Will over a Trust because of the following considerations:

• Simplicity: A Last Will and Testament is generally simpler to create and administer than a trust. This can save time and money, especially for smaller estates.
• Flexibility: A Last Will and Testament can be easily modified or revoked, which can be important if your circumstances change. Trusts, on the other hand, are generally more difficult to modify or revoke.
• Public Record: A Last Will and Testament is a public record, which can be helpful in avoiding disputes over the distribution of your assets. Trusts, on the other hand, are private documents that are not subject to public scrutiny.
• Cost-Effectiveness: A Last Will and Testament is generally less expensive to create and administer than a Trust. This can be important for individuals with limited resources.

An estate planning attorney with Loughlin Law, P.A. may be able to review your circumstances and help you evaluate whether a Will is essential to your estate planning goals. If needed, an experienced estate planning attorney may also be in a position to draft the Will in order to ensure that it will be legally valid under Fla. Rev. Stat. § 732.501 (2023).

Advantages of Trusts vs. Wills

Keeping all of these advantages of Wills vs. Trusts in mind, there are still some situations in which a Trust might be a better fit for some estate planning needs. A Trust may be a better fit for your estate planning goals if the following considerations are especially important to you:

• Control Over Assets: A trust instrument can be a highly flexible document, allowing the Trustor to exercise considerable discretion over not only when and to whom the Trustee should distribute assets to beneficiaries, but also under what conditions, and in some cases how the beneficiaries will be entitled to use the assets – in other words, the Trustor may choose to specify that the Trustee will release certain assets not on a set schedule but only when beneficiaries meet specific criteria, such as graduating from college or having their first child, or for designated purposes, such as paying tuition or buying their first home.
• Avoiding Probate: When a testator passes away, their Will must be validated by the Probate Court and the personal representative appointed before final administration of the estate can commence. Even once the Executor has begun the process of probating the Will, all creditors of the estate must be satisfied before any devises made in the Will can be delivered to beneficiaries. The assets in a Trust are exempt from the probate process, meaning that they will continue to be managed by the Trustee, or distributed to beneficiaries upon the Trustor’s death, in accordance with whatever terms are established in the trust instrument.
• Privacy: The legal proceedings associated with probating a Will are a matter of public record. Anyone can access and view a Will once it is filed with the Probate Court. The instrument used to form a Trust is not a similarly public document, so individuals who highly prize their privacy may prefer a Trust over a Will for privacy reasons.
• Tax Benefits: While Florida does not levy an estate tax as such, the probate estate may still be subject to federal estate taxes in certain circumstances, according to the Internal Revenue Service (IRS). Because the assets in a Trust avoid probate, they also avoid this tax. Beneficiaries of a Trust may in some cases owe taxes on the assets they receive under other tax laws, so consider reviewing the tax implications for beneficiaries with an estate planning attorney.

If you are struggling to decide between the estate planning advantages of Wills vs. Trusts, you may also wish to speak with an estate planning attorney to discuss whether a Pour-Over Will may be right for your situation.

Discuss Estate Planning FAQs With an Experienced Florida Estate Planning Attorney

Individuals who are setting up their Florida estate plans have a variety of options at their disposal. Many people who are establishing their first estate plans, or updating their estate planning documents in light of changing circumstances, have questions about the relative benefits of Wills vs. Trusts. The most appropriate choices will depend on each person’s intent, the assets they have to convey to beneficiaries, and the considerations on which they place the greatest priority. An estate planning lawyer with Loughlin Law, P.A. may be able to review your circumstances with you and help you select a set of estate planning tools to meet your needs. We offer on-site appointments at our Boca Raton office and virtual consultations throughout Florida for maximum convenience and flexibility, so call 561-677-8384 today to schedule your conversation with a member of our team.