Living Trusts, Revocable Trusts and Estate Planning

Many attorneys encourage their Florida clients to prepare a Living Trust. Perhaps the name “Living” is somewhat misleading as it really is a trust for use while you are living and permits a great deal of freedom to change the terms or completely revoke the document if desired. A trust is a legal entity that a person, called a settlor or grantor or trustor transfers assets to, so that it can be administered by a trustee for someone’s (beneficiary’s) benefit. The settlor, trustee, and beneficiary can all be the same person. In simple terms, anyone competent person can set up a living trust and put money, real estate and just about anything else into it, continue to completely manage what they put into the trust and change the terms anytime they wish.

The term “Living Trust” means that the trust was created and took effect during the settlor’s life. A testamentary trust is created by a will, and does not become effective until after the death of the person who created it.

It is normal for the settlor, trustee and beneficiary of a living trust to be the same person at first. In other words, you could put your assets in a living trust, serve as the trustee, and use the trust assets to pay your personal bills.

Many people are reluctant to re-title assets in the name of their living trust. They are afraid they will no longer “own” them. The assets will no longer be in their name. But, they will still control the trust and therefore continue to control the assets.

The trust document will provide for successor trustees in case of incapacity or death and also provide for an ultimate plan of distribution. One of the advantages of a living trust is the control and continuity it offers in being able to use the same trust to manage your assets while living and continue to manage them or distribute them after your death. If funded during your life, the assets can be transferred, after your death, to your heirs without the necessity of a lengthy and expensive probate.

You can establish a “living trust” that is irrevocable. However , this is almost always done for tax reasons. The living trust is a flexible and powerful tool. In fact, it is probably the most significant tool an estate planner has. It is not a complete substitute for a will.

If you find yourself in need of estate planning information it is best to consult an attorney with substantial estate planning experience. There are so many different circumstances that a proper answer to your particular problem can only be obtained by a trained and experienced lawyer.

If you have any question regarding trust, wills, living wills, probate, will contests, or probate litigation, our firm may be able to help you.  EMAIL US.

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