What Is the Difference Between a Will and a Trust?

Will vs. Trust

The main difference between a will and a trust in Florida is how they handle the distribution and management of your assets. A will becomes effective only after you die, while a trust takes effect as soon as it’s created. A will has to go through probate, while a trust allows for private and potentially quicker distribution of assets.

A Florida trust has more estate planning benefits compared to a will. The most well-known benefits are avoidance of guardianship and avoidance of probate. With a living trust, you convey title and ownership of your assets while you are alive to a trustee (which could be yourself). You do not retain legal title to trust assets. The trustee controls and administers your assets for your benefit. You usually serve as grantor, trustee, and lifetime beneficiary.

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The other primary estate planning advantage of a living trust compared to a will is the avoidance of probate upon your death. Probate is a legal proceeding designed to pay your debts after your death and to administer property titled in your name according to the terms of your last will. Property owned by a decedent’s living trust does not require probate. The appointed successor trustee may administer living trust property and transfer the property to trust beneficiaries without probate.

The mere creation of a living trust document does not avoid probate—only those assets whose title you transferred to your living trust can avoid probate upon your death.

Living Trust Administration of Property Outside of Florida

Unlike with wills, living trusts benefit people owning property in multiple states. A separate probate proceeding is necessary in each state where a decedent dies with property titled in the decedent’s name. If you have an interest in assets situated in states outside of Florida, your living trust avoids multiple probate proceedings in the states where each property is located. The singular living trust administration can convey property ownership throughout the U.S. after your death.

Living Trusts Help Preserve Government Benefits

A living trust can help preserve Medicaid benefits for your surviving family members, while a will cannot. A living trust can be designed to help a physically ill spouse retain Medicaid benefits after the death of the healthy spouse even when the ill spouse inherits the assets of the healthy spouse. For example, the living trust can specify an “elective share for Medicaid” that enables the ill spouse to retain benefits and reduce any applicable Medicaid penalty.

Similarly, a will jeopardizes SSI benefits, while a trust can protect them. SSI regulations can deny benefits to persons who inherit significant sums of money. Disclaiming (refusing) the inheritance does not resolve the issue. A customized living trust can incorporate a special needs provision that directs money allocated to a disabled individual to a separate sub-trust designated to receive government benefits. The beneficiary may then continue to receive SSI benefits notwithstanding the additional assets inherited via the special needs trust.

Business Succession Planning in a Living Trust

A living trust can incorporate a business succession plan, while a will cannot do that well. Business succession provisions may be incorporated into your customized living trust agreement. A customized living trust could nominate a special trustee whose primary role is to operate your family business in the event of your death or incapacity. The special trustee can continue business operations without interruption until the business is either sold or finds a new, long-term manager.

About the Author

I’m an attorney who specializes in asset protection planning. I graduated with honors from Emory University Law School and have been practicing law for almost 15 years.

I have helped thousands of clients protect their assets from creditors. Before private practice, I represented the federal government while working for the IRS Office of Chief Counsel.