How Does A Revocable Living Trust Work?
Everyone should have an estate plan in place, but different instruments will be beneficial for different people. One of the most commonly used is referred to as a revocable living trust, and it essentially shields many of your assets from Florida probate, which can help them get to your chosen beneficiaries more quickly and with less red tape than the process might take otherwise. If you are beginning to plan your estate, a revocable living trust may be what you need to ensure your wishes are respected.
How To Create A Trust
A trust is a document created with two purposes: to manage your assets during your lifetime and to provide a framework for your personal representative to distribute your assets after your passing. Not every trust is revocable, but it is generally a good idea to make yours revocable since changes may be necessary, and an irrevocable trust cannot be terminated or modified. With a trust, your assets are no longer in your name, but you still generally have access to them unless you become incapacitated.
The trust is created by the grantor or settlor, by placing assets under its aegis. In other words, a trust does not exist until you place assets in the name of the trust. You can nominate a person or an entity to serve as the trustee (the manager of the trust) or you can act in that capacity yourself. The trustee (or the grantor, if you are acting in that capacity) manages the assets, including any income, and must ensure that the assets are transferred appropriately. If an asset is not properly in the name of the trust, it will likely have to go through Florida probate, which can delay its distribution.
Why Do I Need A Trust?
The major reason why people choose to use a revocable living trust is in order to avoid probate. Probate is a process by which a person’s assets are transferred to their beneficiaries after their debts are paid. However, because the estate’s debts must be paid off before any assets reach beneficiaries, there is a chance that some assets will not be available. In addition, because of potentially competing claims, the probate process can take quite some time to get through – beneficiaries may simply not want to wait the months or years it may take.
The only assets that must go through probate are those in your name that are not set up to automatically transfer to someone else. Assets contained in a revocable living trust will automatically be under the control of the successor trustee (the person who serves as trustee after your passing), so it is not necessary for them to go through probate. It necessarily follows that the more assets are under the aegis of the trust, the smaller estate you will have to go through probate. There are exceptions, but in general, if avoiding probate is your aim, a living trust is one of the best options to help in doing so.
Contact A Naples Estate Planning Attorney
If you have questions, concerns, or just want to set up a complimentary consultation to discuss your personal legal issues in a confidential setting, contact James R. Nici, the Managing Partner of Nici Law Firm, a Naples estate planning attorney with almost 25 years of legal experience. This may be the first step toward ensuring all is how you want it to be going forward. Contact our offices today via our website, or on the telephone at 239-449-6150, to schedule your complimentary consultation.