Florida Wills & Trusts

What is a Will?

A Will is a written document directing the disposition of an individual’s property at death. The person making the Will, the “Testator” decides who will get his or her property. Any person of sound mind and 18 years of age or older, or an emancipated minor, can make a Will. You may name the Personal Representative (Executor) of your Will as you choose, provided that the person is 18 years of age, of sound mind, has not been convicted of a felony, and is domiciled in Florida (there are exceptions to the domicile requirement for relatives).

The Personal Representative is the one who manages your estate upon your death, and may also be a bank or trust company. A portion of the estate can be put into a trust for the benefit of children who are still minors at the time of your death, and a Guardian can be named. Real estate and other assets may be sold without court proceedings, and gifts may be made to charity, if the Will gives the Personal Representative that authority. The Testator decides who will bear the tax burden, the estate or the beneficiaries.

One advantage of a Will over a Trust is that creditors have a shorter time to make a claim against the estate assets. The disadvantage is that a will must be probated, which can be costly and time-consuming. Also, there may be privacy concerns as it becomes a public record.

What Types of Property cannot be transferred by Will?

There are certain interests in property that may not be willed because the right of the owner terminates automatically upon his or her death, or because others have been granted rights by Florida law.

• Homestead – where a person is survived by a spouse or minor child
• A Life Estate – property owned only for the life of the owner
• Property owned jointly with another person(s) with a right of survivorship (includes ownership by a husband and wife, known as tenancy by the entireties)

A person may not disinherit his or her spouse without a properly executed marital agreement. The law gives the surviving spouse a choice to take either his or her share under the Will, or a portion of the decedent’s property determined under Florida’s “elective share” statute.

What is a Trust?

A Trust is an entity created by a “Grantor” (also known as a “Settlor”) to hold property for the benefit of beneficiaries. In Florida there are two basic types of Trusts – Revocable Trusts and Irrevocable Trusts. They are sometimes referred to as “Living” Trusts which simply means that they are created during an individual’s lifetime, as opposed to a Testamentary Trust which is created from the Grantor’s Will upon his or her death.

When a Grantor creates an Irrevocable Trust, he is permanently transferring property to that Trust. He has given the property away and has not retained any right to revoke the Trust or take the property back. This type of Trust is often used for gift and estate planning, Medicaid planning and asset protection.

The more commonly drafted Trust agreement is the Revocable Trust, which can be amended or revoked by the Grantor at any time, for any reason. The Grantor can change the terms and add or remove property, and usually serves as Trustee of the Trust, assuming he or she is healthy and mentally competent. The Grantor names successor Trustees to act upon his incapacity or death. The Trust directs the disposition of property upon the Grantor’s death, as well as how the property should be managed should the Grantor become incapacitated. The Trust serves to avoid Probate because the Trustee has immediate authority to manage and transfer Trust assets upon the Grantor’s death. It can also avoid the need for a court-appointed Guardianship should the Grantor become incapacitated.

Upon Grantor’s death, the Trustee pays all claims and taxes, and distributes the assets to the beneficiaries as described in the Trust agreement. The Trust must be “funded”, that is, the Grantor’s assets must be retitled in the name of the Trust. Assets not titled in the Trust might be subject to Probate. A Pour-over Will is drafted at the same time as the Trust agreement to provide for assets that were not funded into the Trust.

Do You Need a Trust?

For older clients, a Revocable Trust is a good idea and it is worth the extra cost and effort to properly fund and administer it. Younger clients, without children or substantial assets, can be adequately protected with a Will and properly executed Advance Directives.