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Monday, October 30, 2017

The Advantages of a Trust vs. a Will

How can I avoid probate in Florida?

Wills and trusts both allow you to name beneficiaries who will receive your assets in the event of your death.  While wills and trusts share some of the same functions, there are several advantages of a trust as opposed to a will.  If you are setting out creating your estate plan, it is important that you carefully consider the potential estate planning tools available to you.  Our Tampa estate planning lawyer at Verras Law explores the benefits of trusts below.

Revocable and Irrevocable Trusts Explained

A trust creates a fiduciary arrangement that allows the named trustee to hold assets on behalf of the beneficiary.  There are numerous different types of trusts, with trusts being divided into two broad categories:  irrevocable and revocable trusts. Irrevocable trusts involve turning over ownership of your property to the trust.  Once created, irrevocable trusts can only be modified under limited circumstances.  For this reason, irrevocable trusts are not for everyone.  

Revocable trusts, on the other hand, are not permanent and can be altered at any time during your lifetime.  Both irrevocable and revocable trusts come with many advantages as they will often allow you to avoid probate and costly estate taxes.

Avoiding Probate with a Trust

Probate is the court administered process through which a deceased individual’s estate is passed to his or her heirs or beneficiaries.  Probate can be a lengthy process and comes at significant costs.  Further, probate will often involve public disclosure of your estate.

If you die with just a will in place in Florida, your estate will need to go through probate, depending on its size.  However, assets held in a trust do not pass through probate.  Rather, the named successor trustee will have the power to step in and take over administration of the trust.  The successor trustee can then distribute assets in accordance with the terms of the trust.  As such, a trust will shield your assets from the expense of probate and allow your financial affairs to remain private.  

This is not to say that you shouldn’t create a will.  In contrast, it is often critical for you to make a will after you have formed your living trust to account for any property that is not transferred into the trust.  Your will can also name a guardian for your minor children.  Contact your estate planning attorney to get started with your comprehensive estate plan today.

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