Are you considering a trust but unsure what they are, who truly needs them, and how they are created? Many Florida residents have questions about trusts and how they might fit into their estate planning goals. With over 25 years of experience as a South Florida estate planning lawyer, Gary M. Landau understands the importance of providing clarity for clients who might be interested in creating a trust.
Trusts are one potential element some people incorporate into their comprehensive Florida estate plan. There are many different types of trusts, each for a different situation.
This blog answers seven of the most frequently asked questions about trusts in Florida, including what comprises a trust, the various types of trusts, and essential factors to consider if you decide to create a trust.
1. What Is a Trust?
A trust is a legal entity designed to hold, manage, invest, and distribute assets. Once someone transfers assets or real estate property into a trust, the trust becomes the legal owner of those assets.
Trusts generally involve three parties:
- The grantor, the formal word for the person who creates the trust.
- The trustee, who is the person who manages the trust.
- The beneficiary, the person who receives proceeds from trust assets.
Before a grantor creates a trust, they should be clear about the trust’s purposes and consider any conditions they may want to place on the distribution of trust assets.
2. What Are the Various Types of Trusts?
Florida law recognizes many different types of trusts. A few of these include:
- Special needs trusts (SNTs), generally created when a person has a medical condition limiting their ability to handle their own assets.
- Asset protection trusts, generally designed to shield certain assets from the reach of creditors.
- Dynasty trusts, used by extremely wealthy individuals to manage money for their families.
- Living trusts, the most common type in Florida, into which people place assets during their lifetime to enable those assets to pass more easily to heirs after they’re gone.
3. What’s a Revocable Vs. a Non-Revocable Trust?
All trusts fall under one of two main categories: revocable or irrevocable.
As the terms imply, a revocable trust can be modified or revoked at any time during the grantor’s lifetime. In some instances, it may be possible to amend or dissolve an irrevocable trust, but this involves a much more complex procedure generally including a petition of the court.
With a revocable trust, the same person can act as the grantor, trustee, and beneficiary. What this means is that the person retains complete control over trust assets to use as they would like during their lifetime. With irrevocable trusts, the trustee is a separate person responsible for trust management, and the grantor and beneficiaries have no direct access to trust property.
4. Can a Revocable Living Trust Help Me Avoid Probate?
“Does a revocable living trust help avoid probate?” This is one of the most frequently asked questions about trusts in Florida. The answer is maybe.
This largely depends on whether the trust was correctly set up and, importantly, whether all the person’s assets were properly placed into the trust during their lifetime.
Very often, after someone dies it turns out that some (or even a majority) of their assets were not placed into the trust. Either the peson neglected to transfer assets into the revocable living trust when they set it up, or they purchased assets (a new home, new stock accounts…) after the trust was created but did not buy these assets in the name of the trust instead of their own name.
Transferring all property into a revocable living trust is the only way to potentially avoid needing a probate. Even then, though, it’s important to create a “pourover will” covering all assets that may have accidentally not been included.
5. What Happens to a Revocable Living Trust After the Grantor Passes?
Well-drafted trust document should always include the necessary provisions for trust management after your passing or incapacitation. In revocable trusts, this means appointing a successor trustee who will take over trust administration when you die or can no longer handle the management of the trust. Such a successor trustee then becomes the manager of the assets. (Remember that the owner of the assets is still technically the trust.)
After a person’s death, a revocable trust becomes irrevocable, meaning the successor trustee cannot alter the trust’s terms. However they do have access to all of the assets in the trust immediately upon assuming the trustee role.
6. I Already Have a Will. Do I Also Need a Trust?
“Do I need both a will and a trust?” is another frequently asked question about trusts.
Everybody should have a will, including people whose assets are in a trust.
Ultimately, whether you should set up a trust or whether a will is sufficient for your needs depends on your estate planning goals. Some people prefer a trust because, unlike the terms of a will, the terms of a trust remain private after their death.
However, if the original documents creating a trust become lost, (they are not filed with the court), especially after the person dies, this can create huge problems if the assets are in a trust.
7. Do I Need a Florida Trust Lawyer To Set Up a Trust?
While it’s possible to set up a trust without a lawyer’s help, it is not advisable. Ensuring that a trust is created by an experienced estate planning attorney is the best way to feel confident that it was done correctly.
A skilled trust lawyer can:
- Suggest the best type of trust for your needs.
- Help you establish language in a trust that meets your estate planning goals.
- Provide solutions for seamless trust administration in case you become incapacitated or pass away.
- Coordinate between your trust and other estate planning documents, including your will.
- Ensure your trust complies with Florida law and is fully enforceable.
The Law Office Of Gary M. Landau, P.A.: Experienced Trust and Estate Planning Attorney Near Me in Coral Springs, FL
A trust is a valuable legal instrument that in some cases may help you bypass probate and provide for your family.
With more than 25 years of experience and countless satisfied clients, Gary M. Landau and his team are uniquely positioned to help you with your probate and real estate needs in South Florida. Whether you’re ready to probate a loved one’s estate or to write your own will, or if you are purchasing a home, have inherited a home, or want a closing agent to handle title insurance and all documents for your closing or refinancing, the Law Office of Gary M. Landau is ready to work with you.
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The information in this blog post (“post”) is provided for general informational purposes only and may not reflect the current law in your jurisdiction.