Most people execute a Last Will and Testament as their first estate planning document. A simple Will is fine for a very basic estate plan; however, as your estate and your family grow, you will likely need to grow your estate plan as well. In fact, you may decide that a trust works better than a Will as your primary tool for distributing your estate assets. The trust lawyers at Kulas & Crawford explain why a trust is often a better choice than a Will.
How a Last Will and Testament Works
A Last Will and Testament is a fairly simple estate planning tool that allows you to accomplish several basic estate planning goals, including:
- Ensuring that you do not leave behind an intestate estate which would mean the State of Florida intestate succession laws would determine how your estate assets would be distributed.
- Making general and/or specific gifts to chosen beneficiaries
- Choosing someone to be your Executor whose job it will be to administer your estate.
- Nominating someone to be the Guardian of any minor children you have in the event one is ever needed.
Limitations of a Will
Over time, you will likely begin to recognize some of the limitations of a Will. For example, all assets distributed through a Will must go through the probate process, meaning it will be months, even years, before they are actually transferred to the intended beneficiaries. Another drawback to using a Will as your only estate planning tool is that it does not cover incapacity. The terms in a Will only apply after your death. Those terms are also available to the public because your Will must be submitted to the court during the probate of your estate. Finally, your minor children cannot inherit directly from your estate, meaning they cannot legally accept or own the inheritance you leave them in a Will. An adult must manage that inheritance until they reach the age of majority; however, a Will does not let you decide who that adult will be.
Trust Agreement Basics
A trust agreement is also a legal document that serves to establish a trust. A trust is created by a “Settlor” who appoints someone to be the Trustee of the trust. The Trustee is the individual who manages and invests trust assets as well as oversees the administration of the trust according to the trust terms created by the Settlor. Assets held in the trust are distributed by the Trustee according to the terms of the trust. When used to distribute estate assets after the death of a Settlor, the trust terms will tell the Trustee when to distribute assets and which assets to distribute to which beneficiaries.
Why a Trust May Be a Better Choice
Although you should never do away with your Will, you may reach a point when a trust becomes a better choice as your primary estate planning tool. Unlike a Will, the assets held in a trust bypass the probate process, meaning they can be distributed immediately after your death to the named beneficiaries. The terms of a trust are also not made public. Moreover, a trust provides you with the ability to protect and grow your children’s inheritance until they reach the age of majority. You also get to choose the Trustee and decide how and when the assets of the trust are to be distributed to your children. Finally, a trust can also cover the possibility of your own incapacity. By including incapacity planning in your trust, you are able to decide who would take control of your estate assets during a period of incapacity instead of leaving that decision to a judge. It also prevents the possibility of a potentially contentious and divisive court battle over the right to control those assets, something that frequently occurs when incapacity strikes and decisions were not made ahead of time.
Contact Trust Lawyers
For more information, please join us for an upcoming FREE seminar. If you have additional questions or concerns about whether to choose a trust or a Will as your primary estate planning tool, contact the experienced Florida trust attorneys at Kulas & Crawford by calling (772) 398-0720 to schedule an appointment.
