After death, there are generally two ways in which assets/property can be transferred to the living members of the family; one is a will and the other is a living trust. Well… actually, there is one more way. If there is no will or trust, the state takes over. You risk having your estate managed in a way that is inconsistent with your wishes. This is not a position that brings you peace of mind – and it is not a position that helps your loved ones and beneficiaries move forward after your death.
For people who are considering leaving their assets with loved ones, here is a brief outline of Florida wills and living trusts.
What Is A Florida Will?
A will is a legal document created by or on behalf of the individual, also known as a testator, who states how he or she wants the assets or property distributed after death. In most cases, the testator will leave the entire estate to the surviving spouse and/or children. It will also contain an alternative beneficiary in case the spouse dies first. Or the testator may have already included the children and how the assets are to be divided.
Of course, it can be much more complex, with people leaving assets to non-family members, charities, and others. This is why it is so critical to have a document that clearly expresses your wishes. Learn about the six requirements of writing a valid will in Florida.
Now, let’s get into some brass tacks.
What Assets are Distributed in a Will?
- Personal bank account
- Real estate
- Motor vehicles, boat, motor bike, etc
- Personal property like computers, furniture, etc
The Probate Process and Will
In most cases, the testator may have selected an individual (executor) to liquidate the property and disperse the proceeds to the beneficiaries as outlined in the Will. In some cases, the testator may have asked that specific assets be given to a specific organization, religious group, or charity. In Florida, the courts also allow parents of small children to name a guardian in the will.
When does the will come into effect? It is important to understand that a will does not have any legal standing while the testator is alive. In other words, your beneficiaries don’t have access to your assets. The will can be revised at any time, as long as it complies with Florida requirements (e.g. signed by the testator, witnessed by two competent individuals, etc.).
Upon the individual’s death, the will is filed with the courts or what is known as ‘submitting the will to probate.” The executor of the will carries out the directives stated in the will and will also notify the probate court.
In Florida, except for very small estates, the courts usually require that the executor works with a probate lawyer to ensure that the estate is administered legally and as directed. The probate process can take anywhere from 3-24 months, depending on the complexity of the estate, types of assets to be distributed and other obligations of the estate.
Besides the will, another means of transferring assets to beneficiaries is called the living trust. Unlike a will, the living trust is slightly more complex to create. First, the person called the ‘testator’ in a will is called the ‘grantor’ when making a living trust.
Secondly, unlike a will which comes into effect after death, a living trust comes into effect while the grantor is alive. The grantor is, of course, at liberty to do whatever he or she wants with his/her assets while alive. Like a will, the trust will also list a successor trustee and one/more beneficiaries.
If the grantor dies, then the successor trustee will manage the trust for the benefit of the beneficiaries. The distribution of the assets mentioned in the trust to the beneficiaries may be done in one complete sum or the trustee may make periodic payments to the beneficiaries
One major benefit of a living trust is that it is flexible in terms of the distribution of the assets. With a will, the assets are usually transferred but there is little flexibility. With a living trust, the grantor can arrange for the finances to be paid out at certain intervals (eg when the child turns 18) or the trust assets can be utilized for a specific cause like paying for education.
To ensure that the living trust remains an effective method of transferring assets, the grantor not only has to continually make a list of all new properties but also name the trust as owner of any bank account, safety deposit box, etc. if the grantor fails to list the assets, then after his or death, the unlisted assets (stray assets) have to go through the ‘intestate estate.’ To avoid missing any asset for transfer, lawyers recommend also making a will at the same time to ensure that all assets are disposed of accordingly.
At-a-Glance: Florida Will vs. Trust Chart
Here is a quick overview of the differences between a will and a trust.
If you have assets and would like them to be distributed according to your wishes, then it is best to have a will and/or a living trust. To avoid hassles with an invalid will or omission of assets, the best advice is to see a lawyer who specializes in wills.