What Is A Florida Revocable Living Trust?
When most people think about estate planning, they will execute a will and be done with the entire process. In reality, there are multiple different types of estate planning instruments, and many will actually serve your purposes much better than a simple will. One of these instruments is a trust, and perhaps the most common type of trust is called a revocable living trust, designed to give you autonomy during your lifetime while ensuring that your assets are protected. It is a good option for you if you have a complex financial picture or have past personal or professional entanglements.
Four Types of Trusts
Generally, a trust is a legal document that you create (with an attorney), establishing your preferences regarding the disposition of your assets upon your passing. The different types of trusts are distinguishable by (1) their revocability; and (2) and their timing. Trusts may be revocable or irrevocable, which means that they can or cannot be revoked or amended after their creation, and they may also either be living or testamentary – a living trust comes into being during your lifetime, while a testamentary trust is created by your will.
While the issue of revocable vs. irrevocable is usually a matter of personal preference – the only real difference between the two is that if you create an irrevocable trust, you cannot retract gifts or devises to beneficiaries – choosing a living or a testamentary trust can have definite positives and negatives. In a living trust, you place all your assets in the trust, but you retain full autonomy over them, because you are automatically the trustee of the trust you created. A testamentary trust is only created after you have passed, when your successor trustee can in theory make their own choices as to how to govern the trust.
In addition to having greater control over your assets, the other most frequently mentioned positive of a living trust is that it eliminates the need for a long probate process unless you have a lot of creditors. The point of the probate process is to effect the transfer of your assets since your passing. If you have already placed your assets into a trust, however, they can be transferred to your heirs more easily, since you have essentially done the work of the probate court yourself.
Be advised, however, that if you or your estate wind up with creditors (that is, if your trust does not have enough funds to pay off all its debts), the probate process will still have to happen because by law, creditors have the right to seek payment. Fully funding your trust can avoid this issue, but you will also require what is known as a “pour-over” will to ensure that all your assets are managed. A “pour-over” will is a simple will designed specifically to close any loopholes in your trust and other instruments, so that you have the highest possible chance of avoiding probate.
Contact A Florida Estate Planning Attorney Today
Estate planning can be a complex undertaking, but there are ways to avoid potential hassles and confusion. Our Naples trusts attorneys at the Nici Law Firm are happy to try and answer any questions you may have about trusts and help you determine which option would be best for you and your family. Contact our offices today at (239) 449-6150 or use our web form to set up a free consultation.