Some of the most common questions I get from clients relate to whether or not setting up a trust is right for them. A revocable trust can be a vital part of your estate, but isn’t right for every situation. This article will discuss the benefits of revocable trusts in Florida and why having a trust might be right for you.
But first, let’s define what a revocable trust is. A revocable trust, also known as a living trust, is a legal document that allows you to transfer your assets into a trust while you’re still alive. In a revocable trust, you are usually the initial trustee of the trust, and as trustee you maintain control over the assets and can make changes to the trust. When you pass away, the trust assets are distributed to your beneficiaries according to the instructions you have provided.
Now, let’s dive into the benefits of having a revocable trust:
Avoiding Probate
One of the primary benefits of having a revocable trust is avoiding probate. Probate is the legal process of administering a deceased person’s estate, which includes the distribution of assets, payment of debts and taxes, and the transfer of property titles. While Probate is not necessarily as bad as most people think, it can be avoided with a revocable trust. The Florida statute standard attorney’s fees for a basic administering a trust are twenty-five (25%) less than those for a basic probate administration. Florida Statutes §736.1007 (2023). With a trust, your assets are transferred to your beneficiaries outside of probate, usually preserving your privacy, typically avoiding court proceedings and potentially, saving time and money.
Privacy
Probate is a public process, which means anyone can access the court records and see what assets you owned and how they were distributed. If you value privacy, a revocable trust is an excellent option because it allows for the distribution of your assets without going through the probate process, keeping your affairs private.
Flexibility
A revocable trust is a flexible estate planning tool that can be customized to meet your needs. You can modify or revoke the trust at any time, giving you complete control over your assets. Additionally, you can name multiple beneficiaries and specify how your assets should be distributed, including any specific conditions you would like to attach to the distributions.
Asset Protection
A revocable trust can also provide asset protection for your beneficiaries. If you have concerns about your beneficiaries’ financial stability or creditor issues, a trust can protect their inheritance from potential creditors or lawsuits. You can include specific provisions in the trust to ensure that your beneficiaries’ inheritance is protected and not subject to claims against them.
Avoiding Ancillary Probate
If you own property in multiple states, your estate may have to go through probate in each state where the property is located. This process is known as ancillary probate and can be a significant burden on your loved ones. A revocable trust can help you avoid ancillary probate because your assets are transferred to the trust, which is a legal entity that exists regardless of where the property is located. This means your beneficiaries can receive their inheritance without going through multiple probate processes.
Reducing Estate Taxes
A revocable trust can also help you reduce estate taxes. Although Florida does not have a state estate tax, federal estate taxes may still apply, and a trust can help reduce the taxable value of your estate. By placing out of state assets in a trust which becomes irrevocable upon the death of the first spouse, you can potentially freeze the assets value and remove it from the surviving spouse’s taxable estate value, reducing the overall amount of estate taxes owed. (this is grossly oversimplified, and should be discussed with an expert estate planning attorney)
Ease of Administration
Finally, a revocable trust can make estate administration easier for your loved ones. The trust document provides clear instructions on how your assets should be distributed, making it easier for your beneficiaries to understand your wishes and carry them out.
While theoretically you could draft your trust yourself, it is essential to work with an estate planning attorney to create a trust that meets your specific needs and goals. Trust law in Florida can be extremely complicated. Drafting your own trust without an attorney would be like buying a scalpel online and trying to take your own appendix out. Luckily in Fort Myers and Lee County, there are many estate planning attorneys available to assist you in creating a revocable trust.
When searching for an estate planning attorney near you, there are several factors to consider. Look for an attorney with experience in estate planning and a good reputation within the community. You may also want to consider the attorney’s availability and responsiveness to your needs.
When you work with an estate planning attorney to create a revocable trust, you will be involved in every step of the process. You will need to provide the attorney with a complete list of your assets, your desired beneficiaries, and your goals for the trust. The attorney will then draft the trust document, which will include instructions on how your assets should be distributed, who will manage the trust, and any conditions or restrictions you would like to include.
Once the trust is created, you will need to transfer your assets into the trust. This process can be time-consuming and may require the assistance of a financial professional, but it is an essential step in ensuring that your assets are protected and distributed according to your wishes.
In conclusion, a revocable trust is an excellent estate planning tool that can provide many benefits, including avoiding probate, providing privacy, offering flexibility, protecting assets, avoiding ancillary probate, reducing estate taxes, and easing administration for your loved ones. If you are considering a revocable trust, it is essential to work with an experienced estate planning attorney to ensure that your trust meets your specific needs and goals. In Fort Myers and Lee County, there are many estate planning attorneys available to assist you in creating a revocable trust that will protect your assets and provide for your loved ones.
Contact our firm attorney today to learn more about the benefits of revocable trusts and if one can benefit you and your family.
