Some people procrastinate when it comes to estate planning because it all seems so confusing. What is the difference between a will and a trust, and should they draft as a will or establish a trust? Florida residents may learn that just about every person needs a will, and having a trust in addition to a will has some advantages.
A testator drafts a will and an executor carries out the testator’s wishes after his or her death — after the affairs of the testator have been wrapped up and all debts paid. A grantor is an individual who establishes a trust. The grantor can manage the trust until death, at which time a trustee will take over to safeguard and manage the property and assets in the trust. This is the person who will distribute the assets to the beneficiaries according to the specifications contained in the trust document.
The grantor may modify the specifications of a trust whenever he or she wants. Titles or ownership of property and other assets must be transferred into the trust that will then own those assets. A grantor can name his or her trust as the beneficiary of 401(k)2 and IRAs, and specify when and how beneficiaries must receive assets — for example, dates for this can be staggered according to ages or achievements of the children.
The primary advantage of a trust is that it does not go through probate court upon the grantor’s death. However, there are reasons for having a will as well as a trust, one of which is that a guardian for minor children can only be appointed in a will. These are just the basics, and Florida residents may find answers to all their questions about this subject by consulting with an experienced estate planning attorney.
Source: wmur.com, “Money Matters: Wills vs. trusts“, Marc Hebert, April 13, 2017