Differences Between Testamentary Trusts and Living Trusts

When planning for the future, you may be wondering: What type of trust is right for me? Trusts are powerful estate planning tools, but they are not all the same. In Florida, two common options are testamentary trusts and living trusts. Each works differently when it comes to when the trust takes effect, how assets are distributed, and whether changes can be made.

What Is a Testamentary Trust?

A testamentary trust is created through your last will and testament and only comes into effect after your death. The probate court oversees the process, and the trust is set up according to the instructions in your will.

Key points about testamentary trusts:

• They do not avoid probate since the will must be submitted to the court.
• The trust begins only after your passing.
• You decide the terms in advance, such as when and how beneficiaries will receive assets.

For example, you might leave instructions that your children inherit funds at specific ages, or that a surviving spouse has access to income while preserving the principal for other beneficiaries.

What Is a Living Trust?

A living trust is created during its maker’s lifetime and can be revocable or irrevocable. A common estate-planning choice is a revocable living trust, which ordinarily lets its creator retain management and amend or revoke the trust while having the required capacity. The comparisons below refer to that common revocable arrangement.

Living trusts offer several benefits:

• Properly funded living-trust assets generally avoid probate. The timing of distributions still depends on the trust’s terms and administration.
• You can amend or revoke the trust while you are alive, giving you flexibility if your circumstances change.
• Administration is generally more private because a living trust ordinarily is not filed in court solely on the creator’s death. Beneficiary information rights, recorded deeds and court proceedings can still require disclosure.

Funding the trust is an important step. This means retitling assets such as real estate, financial accounts, and other property into the name of the trust.

How Are Assets Distributed?

• Testamentary trust: Probate may be needed to transfer estate property into the trust, and the trustee then administers it under the will’s trust provisions. Funding and distributions depend on the administration and terms; a trust need not wait until every probate task is complete in all circumstances.
• Revocable living trust: Properly titled trust property generally avoids probate, but the successor trustee still must address administration, claims and taxes where applicable. Distribution can take time, particularly when the trust calls for continuing management.

Can You Make Changes?

• Testamentary trust: During life, you can revise its proposed terms by properly changing your will while you have the required capacity. After death the trust is generally irrevocable, but Florida law permits modification or other changes in specified circumstances; “irrevocable” does not mean that no change is ever legally possible.
• Revocable living trust: As long as you are mentally capable, you may change, add, or revoke provisions. This flexibility makes living trusts attractive for people whose financial or family situations evolve over time.

Do Trusts Protect Assets from Creditors?

This is one of the most common questions clients ask.

• Testamentary trusts typically do not shield assets from creditors during the probate process.
• Revocable living trusts also do not protect your assets from your own creditors while you are alive. However, when structured properly, a living trust may provide some protection for beneficiaries after your death, depending on Florida law and the terms you set.

An irrevocable trust may serve particular planning goals, but it is not automatically a creditor shield. Retained benefits, distribution rights, trust terms and the circumstances of funding all matter.

Steps to Create a Trust in Florida

Creating and funding a trust involves several coordinated steps. An attorney can help select the appropriate structure, document the terms and identify the required transfers. Typical steps include:

1. Identify your goals – Decide who you want to benefit, what assets should be included, and whether you want to avoid probate or add protections.
2. Choose the trustee – Select someone you trust to manage the assets. Many people name themselves as trustee of a living trust.
3. Draft the trust document – An attorney prepares the legal paperwork to ensure compliance with Florida law.
4. Sign the trust – Proper execution is required, including witnesses and notarization in some cases.
5. Fund and coordinate the trust: Review which assets should be transferred and which require coordinated beneficiary designations. Do not retitle an IRA or other retirement account into a living trust as though it were an ordinary bank account; that can have serious tax consequences.

Which Trust Is Right for You?

There is no one-size-fits-all answer. Testamentary trusts may be a good fit if you want to set conditions for inheritance but do not mind probate involvement. Living trusts are often preferred if you want flexibility, privacy, and a smoother transfer of assets.

Talk to Verras Law About Your Estate Plan

At Verras Law, we will help you determine whether a testamentary trust, a living trust, or another option best fits your goals. We have experience guiding Florida families through estate planning and administration, from drafting trusts to funding them properly. Contact us today to schedule a consultation and take the next step in protecting your loved ones and your legacy.

Sources: Florida Statutes § 736.04113; Florida Statutes § 736.0505; IRS Publication 590-B.

Updated October 26, 2026.