A Florida living trust is an estate planning tool that allows you to place assets and property into a trust. During your lifetime, you maintain control over these assets. After your death, the trust’s assets are distributed as per your wishes.
When you form the trust, you will name a trustee who will maintain ownership of the trust. You can name yourself as the trustee, or you can name someone else.
A living trust offers many estate planning benefits, but it’s not for everyone. It’s important to understand how to create trust, who it’s for and whether you need one.
How to Create a Florida Living Trust
There are several steps you must take to create a living trust in Florida.
1. Type of Trust
The first step is to determine what type of trust you’ll need. There are two main types of trusts: single and joint.
If you’re single, a single trust is the best option. If you’re married you can either choose to create two separate single trusts, or you can form a joint trust with your partner. If you jointly own real estate or share bank accounts, a joint trust may be the best option.
In addition to single and joint, you need to consider whether you want to form a revocable or irrevocable trust.
With an irrevocable trust, you cannot modify the trust without getting permission from all parties named in the trust. The trust will assume ownership of anything placed inside of it, so things like taxes on the trust’s property will be paid via the trust.
A revocable trust, on the other hand, gives you the freedom to remove property and modify the trust as you see fit. You, the grantor, maintains ownership of the property and will pay taxes as normal.
2. Property Inventory
The next step is to take inventory of your property. Before you can start transferring assets, you need to know exactly what you own. Once you have a complete list of your property, you can decide what you want to include in your trust.
Assets that can be transferred to a living trust include:
- Real estate
- Savings accounts
- Family heirlooms
If you have a retirement account, such as a 401(k), you can name your trust as the beneficiary.
Now is also a good time to gather any documents you may need to transfer your assets, such as car titles, certificates of stock ownership, or home deeds.
3. Name a Trustee
One of the most important steps in creating a living trust is naming a trustee. The trustee will maintain ownership of the trust. You can name yourself, or you can choose another person to act as trustee.
If you name yourself as the trustee, you will need to name a successor trustee who will take over management duties after your death. The successor trustee will ensure your assets are distributed as per your instructions.
4. Create the Trust
The next step is to create the trust document. A Florida trust attorney can assist with this process.
5. Fund the Trust
Finally, once the trust is formed, you can begin transferring property into the trust. You can do this on your own, or with the help of your attorney.
What are the Benefits of a Florida Living Trust?
One of the primary reasons people form living trusts is to make things easier for their families when they die.
A trust is not subject to probate, which can sometimes be a lengthy legal process. If you become incapacitated, you can skip the conservatorship process because you’ve already named a trustee.
A trust can also be beneficial if you’re leaving property to minor children. The trustee will maintain ownership of the assets until the child reaches adulthood.
Do You Need a Living Trust?
Whether or not you need a living trust will depend on your personal preference and your goals. Unfortunately, many adults in the U.S. have not prepared for the end of their lives. Only 4 in 10 Americans have a living trust or a will, according to a study from Caring.com.
Florida’s probate process is different from other states. Estates with less than $75,000 non-exempt assets will go through a simplified probate process called summary administration. This value does not include protected homestead real estate.
With that said, there are still some benefits of a living trust that should be considered. During your lifetime, you can still use and manage your assets just as you normally would. Following your death, your assets will be distributed according to your instructions.
You decide how and when these assets will be distributed. You may want to set specific dates for distribution, or the heir may have to meet certain conditions before inheriting.
“Even if you don’t have the wealth of Steve Jobs or Prince, what you do have means something to somebody,” says Jody Giles, the author of Missing Pieces Plan. “Regardless of the amount of ‘wealth’ you are passing on, let it be handed over based on your wishes, not your state’s laws.”
Ultimately, the decision to create a living trust is a personal one. It’s important to weigh the potential advantages and drawbacks before making your final decision.
Estate planning can be a complicated process. Even reading this far, you likely still have questions.
If you do, you should contact an experienced Florida estate lawyer today to help with living trusts and other estate planning needs.