A living trust, revocable trust, or revocable living trust is an estate planning technique that helps you avoid probate. A trust allows you to transfer all your property to a third party on behalf of the beneficiaries whom you have designated.
Who is in Charge of a Revocable Living Trust?
The third-party who administers or handles the trust is known as your trustee. You can serve as your own trustee during your lifetime. You also can designate a trustee to take over the trust if you become incapacitated or pass away.
What Happens to the Trust Assets After Death?
After your death, the trustee whom you have designated will disburse the trust assets to your beneficiaries as per the terms of your trust. The trust assets will not have to go through probate before being disbursed.
Your trust can also contain provisions in which certain assets continue to be held in the trust for a particular time or until a certain event occurs. For example, you may name your children as beneficiaries of your trust, but you may not want them to receive their respective shares of the trust assets until they turn 25 years old or graduate from college. In this case, the trustee would continue to administer the trust and preserve the trust assets until those events occur and then disburse the trust assets according to the terms of the trust.
However, Florida law provides that trust assets in this type of trust are available to your estate as needed to pay creditors of your estate. So, before the trustee can disburse the assets, the trustee must pay any outstanding bills that your estate owes.
Limitations on the Revocable Living Trust
Nevertheless, the revocable living trust is not without its limitations. There are some restrictions on the ability to avoid probate by placing assets in a revocable living trust. Florida law restricts married persons and those with minor children from devising the homestead. However, if the children are grown and a person is married, the person only can devise it to a spouse. Failure to devise the homestead to the spouse will result in the surviving spouse being entitled to a life estate with the remainder to the children, subject to the surviving spouse’s right to elect to be a 50% tenant-in-common with the children. You will be unable to avoid this legal restriction by placing the homestead in a revocable living trust.
What Are the Advantages of a Revocable Living Trust?
Creating a living trust is one way to ensure that your assets don’t go through probate. Bypassing the probate process can save on legal fees and time wasted on the probate court process. In addition, through the trust, you can help get the trust assets to your beneficiaries sooner if that is what you desire.
In contrast, if you want to place limitations on the ability of your heirs to access their inheritance, a trust can achieve that objective. For example, you can create trust provisions that limit the ability of a trust beneficiary to access part or all of their share of the trust assets until they reach a certain age or a particular event occurs. In this way, you can control the disbursement of the trust assets in a way that you believe to be in the best interest of the beneficiaries.
You also can keep your assets private by creating a trust. When an estate is opened in probate court, the estate and will become a public record, which allows anyone to see the contents of your estate and assets. In contrast, trusts are private documents not available to the public. If you want to keep your assets confidential and out of the public eye, using a trust is a way to accomplish that goal.
Finally, living revocable trusts are revocable and modifiable. As a result, if your circumstances change or you change your mind about how you wish to handle your assets, you can modify or revoke the trust at any time. Changes in your life over time may necessitate changes in your estate plan, and a living revocable trust allows you the flexibility to scrap the trust altogether and create an entirely new estate plan if you choose.
Call Us Today for Assistance with Your Estate Planning Needs
At Kramer, Green, Zuckerman, Greene & Buchsbaum, P.A., we offer comprehensive estate planning services, including the development of living revocable trusts, to minimize the need for probate proceedings in your estate. However, we also offer the full range of estate, probate, and related services when your loved one passes away. We are here to help your family navigate the complex legal problems that often arise after the loss of a family member in the most efficient manner possible. Call us at (954) 966-2112 or find out more about our legal services online. Set up a time to talk to us about your legal needs today.