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Living trusts and wills serve separate uses in estate planning

In Florida many people do estate planning through living trusts and others make a will to distribute their assets after death. The two are different types of legal instruments that generally serve different purposes.  The trust is an estate planning technique that deals with the owner's assets during life. The assets are placed in a revocable living trust by the owner.

The owner may serve as the trustee and because it is revocable, the trust can be dissolved or changed at any time. The assets are held by the trust until a distribution is made during life or at death. There are many uses of a trust in that respect, depending on the needs and desires of the owner. When the assets are distributed after the owner's death, the assets do not go through probate, which is considered by some to be a major benefit of using a revocable living trust.

A will is a document drawn up in estate planning to designate how the testator's assets will be distributed at death. The will, unlike the living trust, does not become legally effective until the testator's death. If the testator should die with no assets, there would essentially be no need for the will because there would be nothing to distribute.

There is another kind of trust that should not be confused with a living trust. That is a testamentary trust, which is created by the testator in the will. The testamentary trust distributes assets after the testator's death to minors or other beneficiaries. The trustee appointed in the will may be directed to hold the assets until the beneficiary reaches a certain age, but there may be periodic distributions prior thereto for the beneficiary's health and welfare.  

In Florida, there are many different reasons why certain estate planning techniques may be used. The best way to determine what is best for any one individual or family is to consult with an estate planning attorney who can discuss and explain the various options. The law is complex in this area and mistakes may be made when one tries to perform these matters on his or her own.

Source: nwtimes.com, "Estate Planning: Distinct differences between wills and trusts", Christopher Yugo, Jan. 21, 2018

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