J. Kelly Kennedy, Attorney/CPA, PLLC

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The difference between trusts and wills

Many Florida residents have likely considered estate planning but may be confused as to the specific components involved in an estate plan. They may have a vague idea of what a will is, but they may not know its specific purpose or how it is supposed to be laid out. Oftentimes, when someone is taught how exactly an estate plan works and what purposes the various components serve, they come to realize the importance of estate planning and are less intimidated by the process.

Two important options used in customizing an estate plan are wills and trusts. Basically, a trust can be used in addition to or as a replacement for a will. Trusts handle the distribution of a person's property, such as cash, investments, real estate and the like, by transferring its benefits and responsibilities to the individuals of a person's choice. By creating a living trust, a person usually will need to re-title assets so that they are owned by the trust, since the person is, effectively, transferring his or her property now as opposed to at the time of his or her death.

A will, on the other hand, simply makes known how a person wants his or her estate to distribute properties following death. The actual transfer of the property does not take place until after the person dies, and the transfer process is guided by state law and overseen to some degree by a court.

The distinctions between a will and a trust are sometimes subtle. While trusts may on the surface appear to have more advantages, they are also more expensive and complex. In the end, there are advantages and disadvantages to both.

By fully engaging in the estate planning process, Florida residents can come to a clearer understanding of these distinctions and decide on a course of action that is best suited for their estate planning goals. An experienced Florida estate planning attorney can be helpful in this respect.

Source: Forbes, "Wills vs. trusts: what's best for retirees?," Thomas and Robert Fross, Feb. 18, 2014

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