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, and it must go through probate, which is a public and often lengthy court process. In contrast, a trust takes effect as soon as it’s created, allows for private and potentially quicker distribution of assets, and can manage your affairs if you’re incapacitated.

A court administers your will in a probate proceeding. The court proceeding sees that any money owed at the time of your death gets paid to your creditors.

A living trust estate plan conveys title and ownership of your assets while you are alive to a trustee of a trust. You do not retain legal title to trust assets. You transfer title to a trustee, who controls and administers your assets for your benefit. You usually serve as grantor, trustee, and lifetime beneficiary.

A Florida living trust has estate planning benefits compared to a will. The most well-known benefits are avoidance of guardianship and avoidance of probate.

Living Trusts Avoid Guardianship

Living trusts avoid guardianship if you become incapacitated during your lifetime. Generally, if a court decides you lack mental capacity, the law requires someone to act as your legal guardian. The court appoints your guardian, who controls you and your property under court supervision through a guardianship legal proceeding. Guardianship is both public and costly. Guardianship requires attorneys to help the family navigate the guardian proceedings.

A  living trust avoids guardianship in the event of your incapacity. Your living trust agreement typically provides that if you cannot manage trust property, a successor beneficiary takes over the administration of trust property for your benefit.

Incapacity is a defined term within the trust document, and a living trust agreement should include procedures for determining your incapacity and recovery. The incapacity provisions of a living trust permit avoid public guardianship if you cannot manage trust assets.

Living Trusts Avoid Probate

The other primary estate planning advantage of a living trust 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

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. 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 living trust may be drafted to protect Supplemental Security Income (SSI) benefits. 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

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.