Why You Need A Living Trust
As lawyers, one of the most common misunderstandings we see is the assumption that by completing a Last Will and Testament, all of your assets and property will be distributed without court intervention should anything happen to you. Did you know that in the state of Florida, this is not necessarily true? So how do you go about making sure you’re covered?
So, What Exactly is a Trust?
A living trust is a document created by you during your lifetime, in which assets, property, or your estate, are organized should anything happen to you. As the creator of the trust, you are the “grantor” and can decide the terms as well as the trustee, or the person who is the recipient of that trust. You could appoint yourself as trustee or a close friend or relative, however, if you appoint yourself, you should appoint a successor trustee to manage the assets in the trust once you have passed away.
What does a Trustee do?
The trustee will have control over the assets and property placed in the trust. The trustee is also responsible for distributing the assets/ property held in the trust to beneficiaries as instructed by the document.
What to Consider When Creating your Living Trust
- Take inventory of your assets. Before creating your trust, you must know exactly what you own and how your property is titled. Assets that may be placed in a living trust include real estate, cars, savings accounts, and stocks. You may also list your trust as a beneficiary to a 401(k) or IRA accounts. Any assets that you overlook will have to be entered into Probate, thus it is crucial to account for all your assets ahead of time.
- Your legal marital status. If you are single, then you will just need a single trust. But if you have a spouse, speak to him/her about whether you both would like to create separate trusts or create a joint trust. For example, a joint trust may be a better option if you and your spouse have several joint accounts and own joint properties.
- Who you want to appoint as your trustee. When you create your living trust, you will likely also appoint yourself as the trustee. Thus, during your life, you will control the assets in your trust and benefit from their use. Accordingly, you will need to appoint a trustee to take over the role after you die. The successor trustee will be responsible for managing the assets in your trust for the benefit of your beneficiaries. If you leave special instructions on how you want your assets to be distributed, the successor trustee will be responsible for carrying out the distributions according to your instructions.
Do you still need a Will if you have a Living Trust?
The short answer is yes. You always need a will. Many people use a living trust in place of a will. However, a will provides a plan for any property or assets that does not make it into your living trust. For example, you may acquire new property and die before adding it to your trust. That property would not pass under the terms of your trust. But you can use a will to pass property not listed in your trust to other beneficiaries. If you fail to execute a will, any property that is not included in your trust document will pass to relatives as determined by Florida law. To avoid this, it is beneficial to prepare both a trust and a will. An attorney who specializes in Florida probate law can go into further details about the pros of having both a will and a trust.
So why get a living trust? The most important benefit of creating a living trust in Florida is to make things easier for your family when you pass away. The property and assets you place in your trust will pass to the designated beneficiaries without having to go through probate. Probate is a lengthy legal process that would otherwise cost your family time and money.
If you decide to create a living trust, consult with an attorney who specializes in Florida Probate law. The Florida Probate & Family Law Firm has a team of experienced Probate and Estate Planning attorneys who can explain what options are available to you and what will work best to protect you and your family’s best interests. If you would like to learn more about how you may benefit from a living trust, contact us to set up an appointment. We serve the entire state of Florida. Call us today or email us for a consultation.