Differences Between A Living Trust And A Testamentary Trust
It may not be the most bright and cheery task to work through, but establishing an estate plan and developing end-of-life documents is a necessary one nevertheless. Two types of trusts that can often be confused with each other are Testamentary Trusts and Living Trusts. There are pros and cons to each and figuring out which is the right for your specific situation can be perplexing. Ultimately, you want to choose the right planning tools to get the most out of your estate plan. For this reason, it is best to work with an experienced legal professional that understands the intricacies that come with developing a plan for one’s accumulated life’s wealth.
If you reside in The Villages, Florida and you need assistance with your estate plan, help exists. The Villages Wills and Trusts attorneys at Millhorn Elder Law Planning Group can chat with you to get a better understanding of your objectives and advise you on what options are available that will be the most advantageous to consider.
Elements of Testamentary Trusts and Living Trusts
Some or all of the assets outlined in one’s Will can be placed into either the testamentary trust or living trust. But, where the living trust is established during one’s life, a testamentary trust is not. A testamentary trust only becomes active after death. Still, an individual’s wishes can be outlined in a testamentary trust while they are still living so that they can have a say in how they want their estate to be managed. But beneficiaries in this situation will not receive anything or inherit assets allocated to them until after the individual’s death.
This is not the case for a living trust. During an individual’s life, beneficiaries of a living trust may obtain assets without death being a prerequisite. Also, a living trust has flexibility. If the trustor, or the individual that made the living trust, wants to have the ability to make adjustments they can with a revocable trust. By contrast, in an irrevocable living trust, the trustor will not make changes. Similarly, due to the nature of a testamentary trust, once it is started it is automatically irrevocable as the creator is no longer living and cannot make any modifications to the instructions.
One of the most significant downsides of a testamentary trust is that beneficiaries will have to wait to obtain their inheritance due to the probate process. This could mean that many months could pass after a person’s death before beneficiaries receive what was intended to go to them.
Living trusts also have drawbacks. Most notably, their cost.
Speak to a Florida Estate Planning Attorney Today
When you are putting together your estate plan it is essential that it is specifically designed to address your wishes and hits all of the marks. To ensure that you can put together a comprehensive estate plan that works best for your situation, the Florida estate planning attorneys at Millhorn Elder Law Planning Group can assist you. To schedule a free consultation please call 800-743-9732.