Trusts are useful legal tools for individuals who want to preserve their estate upon death and ensure smooth distribution to beneficiaries. In this sense, setting up a trust guarantees the trust maker’s assets will not go through probate, a complex and time-consuming process for beneficiaries.
Considering there are several types of trusts, one of the most popular options in Florida is a living trust. In this article, you will discover the essentials about living trusts in Florida.
What is a Living Trust? – Explaining the Term
In layman’s terms, a trust is a tool used to preserve someone’s estate, protect it from creditors, and guarantee a smooth distribution to its rightful beneficiaries upon the passing of the trust maker.
In this type of legal arrangement, the person setting up the trust (grantor) transfers the title of a property or a group of assets to a trustee for the benefit of a third party (beneficiary). The trustee has a fiduciary duty, meaning he/she must take care of the assets held in the trust to exclusively benefit the grantor and the beneficiaries.
The term “living trust” is used to describe a trust created while the grantor is alive. This way, the beneficiaries will receive the assets held within the trust only upon the grantor’s passing.
Living Trust in Florida – Revocable Trust vs. Irrevocable Trust
When creating a trust in Florida, the person setting up the legal arrangement has two options – a revocable trust or an irrevocable trust. The most common option is a revocable living trust.
This type of trust can be modified or revoked if the grantor decides to do so. Usually, the grantor to a revocable trust acts as the trustee simultaneously. This way, as long as the grantor is still alive, he/she retains control of the trust and all assets held within it.
Every trust needs a trust agreement, which is a document that structures the legal arrangement and details all its provisions. When drafting a revocable trust agreement, the grantor must name a trustee to succeed him/her and manage the trust upon their death.
On the other hand, an irrevocable trust cannot be revoked, modified, or amended after the grantor signs it. In most cases, this type of legal arrangement is used in limited cases, as it requires giving up control and ownership of the property held transferred into the trust.
Is Still a Last Will Necessary When There is a Living Trust?
Although setting up a living trust may save someone’s loved ones from time-consuming and expensive probate proceedings, the ideal approach is to have a last will in place. However, why write a last will if there is a living trust?
First, the last will can be used to designate guardianship, while a trust cannot. If the grantor in a living trust has minor children, writing a last will and designating a guardian for them is essential.
Additionally, the last will encompasses property not transferred to a living trust. Although it may sound a bit off at first, many individuals forget to formally transfer property to a trust, or they die before they can do so.
Besides, many people inherit property after setting up a living trust, but they do not know how to take ownership of the asset as the trust’s trustee. Regardless, if an asset is left out of a trust and there is no last will in place upon the grantor’s death, this asset will not be distributed according to the terms in the trust agreement.
In such cases, the last will serve as a backup to determine the distribution of assets not held within the trust and guarantee the beneficiaries will receive them.
How to Create a Living Trust in Florida – Work with Attorney Romy B. Jurado Today
The best approach to create a living trust in Florida is to rely on the guidance of an expert estate planning attorney. Waste no time with uncertainty – call Attorney Romy B. Jurado at (305) 921-0976 or email us at [email protected] to schedule a consultation.