Do I Need a Will or a Trust?
Nydia Menendez • Jul 02, 2021
by Estate Planning Attorney Nydia Menéndez
If you have reached a time in life when you are planning for the future, you have most likely have come across two of the most commonly known Estate Planning tools: A Last Will And Testament and A Revocable Living Trust. Both documents provide instructions on how your assets will be distributed when you pass away. However, it is important to know the differences between these two alternatives work and what it means to have one or the other.
Having a Last Will
Everyone has an Estate, which is what is left when we pass away. An Estate consists of assets – our stuff. A Will is a document which activates at death, in which you leave specific instructions regarding the distribution of those assets. The instructions are limited as to simply who will receive the assets, not how they will receive them.
For example, let’s assume you have three children, or three people to whom you want to leave your assets. One is super responsible, but is contemplating divorce; the other is the picture of irresponsibility and recklessness. (With this person money is like salt in water – it vanishes!) The third person has special needs and will likely never be self-sufficient.
If you use a Will to leave assets to these individuals, the entire inheritance could be lost to divorce, lawsuits, creditors or poor decisions. You could even cause the special needs individual to lose government benefits to which he or she would otherwise be entitled. As you can see, using a Will to distribute assets to those you love and want to bless, could do more harm than good.
Many people think a Will is the key to leaving their affairs in order. But that is not the case. In fact, Wills are very ineffective because in addition to what I’ve already mentioned, they must be administered by a court through the Probate process. That’s a lengthy and expensive undertaking.
Having a Revocable Living Trust
A Trust, on the other hand, is a document which creates a separate entity. You can think of a Trust as a company; the Trustee would be the President or the manager of the company; and the Successor Trustee would be similar to the Vice President of the company. In other words, a Trust has the ability to receive, keep and manage your assets. At the same time, a Trust survives the person who created the Trust in the first place. If you use a Trust for your planning, you can simultaneously create sub-Trusts for the distributions to each beneficiary to address their very unique needs.
With a Trust, if you become incapacitated, there would be no Guardianship or Living Probate, because you would have already nominated the person or persons authorized to manage your assets: the Successor Trustee(s).
Also, when you pass away, there would be no need for Death Probate, because your assets are already in a Trust, you’ve nominated Successor Trustees, and you have left instructions about what should happen with your assets. You’ve not only designated who should get your assets, but also how your beneficiaries should get them. This is a huge difference between a Will and a Trust.
A Trust can be managed by the Successor Trustee, who was originally appointed by you when the Trust was created. Thus, an inherent benefit of the Trust is that the person who created the Trust (you) nominates the Successor Trustee, and because the assets are already in the Trust, there is no need for court involvement. Hence, you are always in control!
These are just a few examples, which clearly show why a Will is usually not the optimal Estate Planning tool, and a Trust is likely the much better alternative.
Where to Get Started?
If you want to learn more about how to plan for your future to make sure you leave a legacy for your loved ones, we invite you to call our office at (954) 963-7220 to speak with a member of the Menéndez Law Firm who can help you navigate the process of creating a unique Estate Plan to meet your family’s needs. You may also want to watch the video series on our YouTube channel or join us for the next live Wills, Trusts and Estate Planning webinar on Zoom by registering at no charge on our website www.menendezlawfirm.com
Nydia Menendez, The Florida Tax Girl - Nov 1, 2023
Nydia Menendez, The Florida Tax Girl - Oct 2, 2023
La Ley de Transparencia Empresarial (la "CTA" o la "Ley") entrará en vigor en unas pocas semanas, el 1 de enero de 2024. Sin embargo, la Ley impondrá nuevos requisitos de información a aproximadamente 32 millones de pequeñas empresas, con importantes sanciones civiles y penales. Por este motivo, es posible que sea necesario actuar de inmediato antes de finales de 2023 para reducir o retrasar el impacto de la LTC en caso de que le afecte.
Do you want to know what is the Corporate Transparency Act?
Cost of Rents and Other Paid Uses of Real Property.
Did you know Florida estate planning is not just about creating a last will and testament? It is also about considering the intricacies of asset management, preservation, and protection for your loved ones. In this article, our attorney, Nydia Menendez, explores this crucial aspect of estate planning that is often overlooked and sheds light on why wills alone may not adequately address these concerns. One of the many benefits of working with an experienced law firm like ours is learning how to consider these factors, which can lead to a more comprehensive and thoughtful estate plan for the benefit of you and your loved ones. We begin by helping you understand the limits of a last will and testament. While wills serve as a common estate planning tool, they possess limitations that can have significant implications for your beneficiaries. Let us delve into a few of these aspects that go beyond simple distribution right here in our blog. Asset Management During Incapacity. A will activates at death. For this reason, a key shortcoming of relying solely on a last will and testament is its lack of provision for managing your assets if you become incapacitated during your lifetime. What happens to your estate when you're unable to manage it yourself? This is not a question you want to leave to chance. Instead, you want to answer it early. Tax Planning and Minimization. Taxes can substantially affect the value of the inheritance your beneficiaries receive. A will may not account for tax planning or minimization strategies that could ultimately benefit your loved ones. Asset Protection for Beneficiaries. Ensuring that your beneficiaries' inheritance remains secure from creditors, divorces, or unforeseen challenges is a critical consideration. When you plan early with your experienced Florida estate planning attorney you can answer the question of: How can you safeguard the financial future of your beneficiaries? Let's delve into some scenarios that illustrate the unintended consequences that can arise when relying solely on a last will and testament for estate planning, especially in Florida. Remarriage's Impact on Inheritance. If your spouse remarries after your passing, their new marriage could potentially jeopardize your children's inheritance. Without proper planning, assets intended for your children might end up benefiting someone else. Challenges for Minor Beneficiaries. In Florida, minors cannot own property valued over $15,000. This limitation could mean that substantial wealth left to minors could require court intervention. And even more tragically, at the age of 18, which is the age of “adulthood” any inheritance that is being safeguarded is distributed to the now “adult” beneficiary. Are your beneficiaries prepared for this? Beneficiary Readiness and Vulnerabilities. Even if your beneficiaries are adults, are they ready to manage a substantial inheritance? Consider their financial responsibilities, potential creditor issues, divorces, addictions, and government benefit entitlements. The Probate Predicament. The necessity of probate is a significant drawback of relying solely on a last will and testament. This court-administered process can be time-consuming, expensive, and subject to complications. Probate can lead to unintended delays and disputes that affect your beneficiaries. Our attorney Nydia Menendez wants to share with you that there is indeed a more comprehensive and effective way to ensure your assets are distributed and managed in alignment with your intentions. By considering alternatives to a last will and testament, you can navigate the potential unintended consequences and complexities that arise. Planning your estate goes beyond the basics of a last will and testament. It involves careful consideration of the future implications of asset distribution, management, and preservation. Understanding the unintended consequences that beneficiaries might face and addressing them through alternative strategies can result in a more robust estate plan. In Florida, as elsewhere, your assets deserve the thoughtful protection and management that only a comprehensive estate plan can provide. Your beneficiaries' futures will benefit from the care and foresight that only comprehensive estate planning can provide. We know this article may raise more questions than it answers. And that is exactly what estate planning should do: create questions to allow you the opportunity to resolve in advance the many uncertainties that life can bring your way. At Menendez Law Firm, we understand that when you protect what matters most to you, you will experience the peace of mind that you deserve. When thinking of the future regarding your property, it is essential that you have a law firm that you can trust to help you prepare everything you need. The expert attorneys at Menendez Law Firm in Fort Lauderdale, Florida, provide you with the highest level of professionalism and responsiveness to ensure you get the personal attention you deserve when planning out the future of your estate and so much more. Do not wait to contact us today!
At Menendez Law Firm, because we are a Florida law firm, and 1 in 5 Florida residents are over the age of 65, we frequently work with the adult children of aging parents.
We are a Florida estate planning firm. We know the important discussions that need to take place as soon as possible as you face a health care issue.
A Florida probate attorney is hired to administer the estate of the decedent and works alongside the Personal Representative (who must be appointed by the court) and the probate court.
At Menendez Law Firm we make sure our clients understand the importance of creating a Florida estate plan. It is important that clients take action to implement a plan now, so that in a time of sudden crisis or death, their wishes are not left to chance or to the state of Florida mandated process.
BROWSE OUR WEBSITE
CONTACT INFORMATION
Phone: (954) 963-7220
Email: welcome@menendezlawfirm.com
BUSINESS HOURS
Monday
9:00 am - 5:00 pm
Tuesday
9:00 am - 5:00 pm
Wednesday
9:00 am - 5:00 pm
Thursday
9:00 am - 5:00 pm
Friday
Closed
