Wills Vs Trusts: Which One Is Right For You?
July 8, 2022
Wills and trusts are legal documents that help protect your property and loved ones and direct the transfer of assets according to your wishes. Many people think they need to choose only one document when setting up an estate plan. However, the truth is that both a will and a trust can complement one another, helping you create a comprehensive and detailed estate plan.
If you want to know the benefits and drawbacks of a will or trust, seek legal guidance from an estate planning attorney. At Michael A. Siefert, P.A., I assist clients in Ocala, Florida, and throughout Marion County, with developing estate plans to fit the needs and goals of each client.
Why You Should Have an Estate Plan
Contrary to popular opinion, estate planning is for everyone—not just for the ultra-wealthy or the elderly. There are at least four reasons why you should have an estate plan:
Reduce the cost of probate or avoid probate altogether. Probate is known to be a costly and drawn-out process. A skilled estate planning attorney can help develop a plan to minimize probate-related costs or avoid probate altogether.
Distribute your assets according to your wishes. One of the main reasons people set up an estate plan is to specify their wishes for the distribution of assets after their death. Without an estate plan, the decedent’s property will be distributed according to the state’s intestacy laws.
Prepare for an unexpected incapacity. In most cases, incapacity is an unexpected and sudden event that prevents a person from making decisions on their own. Planning for incapacity can become a critical part of an estate plan.
Make your wishes known to your loved ones. An estate plan allows you to communicate your wishes and goals to your loved ones to ensure that your family understands your final wishes in the event of your incapacity or passing.
Many people wonder, “Should I choose a will or a trust for my estate plan?” However, there is no need to choose only one when creating an estate plan.
Wills in Florida
A will is a document that is commonly referred to as a last will and testament. This document directs the distribution of your assets following your death, allows you to choose the executor of your estate, appoints guardians for your children, and accomplishes other important objectives.
Creating an estate plan can become complicated when you do not understand the different types of wills. Below are some of the most common types of wills:
A simple will is a basic document that states who will inherit your assets after your passing.
A living will is not like other wills. This legal document spells out your preferences for medical care at the end of life.
A joint will is a document prepared by the couple to combine the wishes of both spouses or partners and cannot be changed or revoked without the other party’s permission.
A mirror will refers to two documents created by both spouses or partners and containing identical or nearly identical provisions.
When writing a will, it is essential to understand the legal requirements for creating a valid will in your state. In Florida, for example, a will must be in writing and signed in the presence of two witnesses.
Some of the advantages of creating a will include:
Writing a will is relatively simple
A will allows you to distribute assets as you wish
A will can include arrangements for children, loved ones with special needs, pets, and others
Some of the disadvantages of a will include:
Your assets may still be subject to probate
A will becomes a public record during the probate process
Revocable & Irrevocable Trusts
A trust is a legal vehicle (document) that gives you the power to designate a trustee to hold property for the benefit of another. While there are several types of trusts, these documents generally fall into two categories:
Revocable. A revocable trust means that you can retain control of your assets during your lifetime and can revoke the trust entirely at any time should your circumstances or wishes change.
Irrevocable. An irrevocable trust will remove assets from your taxable estate, which means these assets will avoid probate. Unlike a revocable trust, an irrevocable trust cannot be changed or revoked once it has been executed.
Some of the advantages of setting up a trust include:
Assets that have been transferred to a trust avoid probate
Your personal and financial matters will remain private because your assets will not go through probate
Transferring assets in a trust can provide significant tax benefits
Some of the disadvantages of a trust include the additional paperwork that is required to ensure that the arrangement is legally binding. Furthermore, having a trust requires you to keep detailed records of the assets held in a trust. A trust is typically tremendously beneficial despite these drawbacks, however. Separately or together, both wills and trusts can be a great addition to a comprehensive estate plan.
Knowledgeable & Compassionate Counsel
As an estate planning attorney at Michael A. Siefert, P.A., I provide knowledgeable and compassionate counsel to individuals and families in Ocala and elsewhere in Marion County. I can review your particular situation to identify the estate planning tools you need in your specific case. Whether you need a will or a trust, I can help you develop a customized estate plan that meets your unique goals and needs.