Wills vs. Trusts in Florida: Choosing the Right Estate Planning Tool for Your Family
At Smith Cors Law, one of the most common questions we hear is: “Do I need a will or a trust?” The short answer is: it depends. Both wills and trusts serve vital roles in estate planning, but each has distinct advantages and limitations. Understanding when, why, and how to use them can help you protect your family’s future more effectively. In this post, we’ll compare wills and trusts under Florida law, outlining the benefits, drawbacks, and best-fit scenarios for each approach.
What Is a Will?
A Last Will and Testament is a legal document that spells out how you want your property distributed after your death. It also allows you to name a personal representative (executor) to oversee the distribution of assets, pay debts, and handle other estate matters. Additionally, if you have minor children, a will is where you designate a guardian.
- Formal Requirements in Florida
- Must be in writing and signed by the testator (the person making the will).
- Requires two witnesses, each of whom signs in the presence of the testator and the other.
- The optional self-proving affidavit can expedite the probate process by reducing the need to locate witnesses later.
- Probate
- A will does not bypass probate. Instead, it directs how assets move through the probate process.
- Probate is public record, so the contents of your will may become accessible to interested parties.
- Advantages of a Will
- Straightforward and less expensive to create initially.
- Suitable for those with simpler estates or fewer privacy concerns.
- Allows you to name a guardian for minor children and specify funeral wishes if you desire.
- Drawbacks
- Public probate can be time-consuming and potentially costly.
- Offers no built-in incapacity planning (a separate durable power of attorney or healthcare directive is necessary).
What Is a Trust?
A trust is a legal structure where a grantor transfers ownership of assets to a trustee, who manages them for the benefit of one or more beneficiaries. In Florida, the most commonly used trust for estate planning is the revocable living trust (RLT). Another category is the irrevocable trust, which can offer asset protection and potential tax benefits, but comes with more restrictions on changes.
- Funding the Trust
- To be effective, assets (such as a home, bank accounts, and brokerage portfolios) must be retitled in the trust’s name.
- Any asset not retitled typically goes through probate unless it has a designated beneficiary.
- Avoiding Probate
- A properly funded revocable trust enables assets to bypass probate, offering a faster and more private transfer to beneficiaries.
- Advantages of a Trust
- Privacy: Trust documents are generally not part of public records.
- Incapacity Planning: Your successor trustee can step in to manage trust assets if you become incapacitated.
- Potentially Faster Inheritance: Beneficiaries may receive assets more quickly, without having to wait for probate.
- Drawbacks
- Higher initial cost and complexity due to the need for comprehensive funding.
- Doesn’t inherently provide creditor protection during your lifetime if it’s revocable.
Wills vs. Trusts: Key Distinctions
Probate Involvement
- Will: Assets specified in the will are subject to probate.
- Trust: Properly funded trust assets avoid probate.
Privacy
- Will: Becomes public after filing in probate court.
- Trust: Typically remains private unless litigated.
Incapacity Planning
- Will: Becomes effective only at death. No incapacity protection.
- Trust: Revocable living trusts can include provisions for trustee succession in the event of incapacity.
Ease of Updates
- Will: Can be changed at any time via a codicil or rewriting, subject to the same formalities as the original.
- Trust: Revocable trusts can also be amended or revoked, though changes require precise drafting and retitling if new assets are added.
When Is a Will Sufficient?
- Simple Estates: If you’re comfortable going through probate, or your estate is small, a will may suffice.
- Limited Privacy Concerns: Individuals who don’t mind public disclosure of their estate’s details might be okay relying on a will.
- Straightforward Beneficiary Designations: If you have a few significant assets and concise instructions for their distribution, a will can efficiently handle the process.
When Might a Trust Be Better?
- Privacy and Speed: Those who prefer to keep their financial affairs confidential and avoid probate often opt for a trust.
- Second Marriages or Blended Families: Trusts can carefully outline distribution to children from a prior relationship while providing for a spouse.
- Real Estate in Multiple States: A revocable trust can help avoid ancillary probate in other states where you own property, streamlining the administration process.
Can You Have Both a Will and a Trust?
Yes. It’s common to have a pour-over will that acts as a safety net, ensuring any assets not retitled into your trust before death “pour over” into the trust. This measure helps unify the distribution plan even if you miss retitling an asset.
Additional Considerations
1. Homestead Property
In Florida, your primary residence often receives special protections and requires careful planning due to homestead restrictions. You can incorporate your homestead property into a trust if it’s done correctly. If you’re married or have minor children, consult an attorney to ensure your plan doesn’t violate constitutional constraints.
2. Special Needs Beneficiaries
If a child or family member relies on government benefits, a special needs trust may be necessary to preserve eligibility. A simple will might inadvertently disqualify them from critical assistance.
3. Asset Protection
A revocable living trust does not provide robust creditor protection for the grantor. If protection from lawsuits or creditors is a priority, other strategies, such as irrevocable trusts or proper liability insurance, may be necessary.
Common Myths
- “I Don’t Need a Will or Trust if I Have Beneficiary Designations.”
While life insurance and retirement accounts name beneficiaries, you may have other assets, such as bank accounts and real estate, or guardianship issues that require the clarity of a will or trust. - “A Trust is Only for the Wealthy.”
Not so. A trust can benefit individuals with moderate assets, especially if privacy or preventing family disputes is essential. - “A Will Avoids Probate.”
A will alone does not bypass probate; it merely guides the court through the probate process.
Steps to Decide: Will, Trust, or Both
- Assess Your Assets: Identify the nature, location, and value of your assets.
- Consider Your Family Needs: Are there minor children, a blended family, or a loved one with special needs?
- Evaluate Privacy Concerns: Determine the importance of confidentiality to you.
- Plan for Incapacity: Consider how you would like your finances to be managed if you are unable to handle them personally.
- Consult an Attorney: Professional advice ensures compliance with Florida’s specific laws regarding homestead, spousal elective share, and other relevant matters.
Conclusion
Deciding between a will and a trust depends on personal circumstances, family structure, and the complexity of your estate. Many Floridians find a revocable living trust beneficial for privacy, efficiency, and incapacity planning, yet a carefully drafted will can suffice in simpler situations. Often, combining both—a trust for significant assets and a pour-over will for residual property—offers the best of both worlds.
At Smith Cors Law, we help you weigh the pros and cons in the context of Florida law, ensuring your plan aligns with your values and protects your loved ones. If you’re uncertain about the right approach, reach out for a consultation. Together, we’ll design an estate plan that brings you peace of mind.
Disclaimer: This post is for informational purposes only and does not create an attorney-client relationship. Laws change, and your individual circumstances matter. For personalized legal advice, consult a licensed Florida attorney. No aspect of this content has been approved by the Supreme Court of Florida.
Jason Smith, a Marion County native and former state prosecutor, has built a distinguished trial practice while also teaching criminal justice at Pasco-Hernando State College and Saint Leo University, and leading Jericho Road Ministries as Board President.
