Estate Planning In Florida
This site will introduce the topic of living trusts in Florida and help you develop effective questions prior to meeting with an estate planner. There are many estate planning tools not covered on this site and some information may be incorrect or out-dated, so talk to an attorney before taking any actions from this site. This website does not provide any legal, tax, insurance nor financial advice, products or services. Every family's situation is different which is why it is important to get legal advice from an attorney. Don't forget to review your documents periodically. Estate planning is an ongoing process as your needs and goals change over time.
Introduction to revocable living trusts
While a last will & testament is essentially a set of instructions on how to dispose of assets, a trust can be pictured as a box. The box can hold assets such as real estate, bank accounts and life insurance payouts long after the trust's creator passes. The living trust's creators are called grantors (aka settlors and trustors). A single person, married couple, unmarried couple or same-sex couple may create a living trust. Neither a parent and a child, siblings nor business partners can create a living trust as co-grantors.
The grantor of a living trust is often the initial trustee and also the initial beneficiary.
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Why use a living trust?
The decision to include a living trust in an estate plan will be based on needs identified in the planning process. Below are several common situations which may benefit from a living trust or related estate planning tool:-
Parents with life insurance and dependent children may choose to use a living trust to hold life insurance payouts until children are financially ready. Read more
Parents with dependent children wish for the guardians and children to have use of the primary residence until children have graduated school. Read more
Spouses in a blended family wish for assets to be available to a surviving spouse before being distributed to each spouse's own children. Read more
A beneficiary receiving disability income could lose benefits by receiving an inheritance. Living trusts can hold an inheritance and not affect benefits. Read more
Families with real estate and other assets subject to probate totaling over $75,000 may wish to avoid the court process of probate. Read more
Living trusts don't reduce federal estate taxes for individuals but they can double exemptions for married couples over the limit. Read more
What living trusts don't do
- Revocable living trusts do not protect assets from creditors or law suits. Irrevocable trusts can be used to protect assets from creditors though control of assets can become limited. Consult an attorney for more information.
- Living trusts do not take control away of assets by the person creating the trust - as long as the creator names himself/herself the initial trustee of the living trust.
- Living trusts do not greatly speed up the transfer of the estate by skipping probate. A successor trustee could distribute assets immediately but it can put the successor trustees at risk if debts are left unpaid. The process can go faster though since a court is not needed to oversee each step.
- Living trusts do not prevent probate automatically for all assets. Assets must be transferred into the living trust PRIOR to the grantor's passing unless assets outside the trust already have beneficiaries (life insurance, IRAs, etc) or are jointly owned with rights of survivorship.
