If you are wondering what a living trust is, it is a document similar to a traditional will but comes with some advantages, including the ability for the person to continue managing his or her assets while alive. Upon the person’s death, the beneficiaries named in the living trust will receive the specified benefits, just like with a will.
Florida Statutes § 736 specifies the rules those creating the living trust must follow to remain in compliance with state laws. An Orlando estate planning lawyer can help you create the living trust so that it follows all required rules to serve as a legal document.
Benefits of a Living Trust
In the right situation, a living trust is highly beneficial for both the person who owns the trust and for his or her beneficiaries for a number of reasons, such as:
Avoiding Probate Court
With a living trust, upon your death, your assets transfer far more quickly to your beneficiaries than if your estate must go through probate court. In probate, the court supervises the distributions, which can take months or years, should legal challenges occur.
Saving Legal Costs
If someone challenges a will or chooses to fight the actions of the probate court, your estate may incur significant legal costs, reducing the amount remaining for your beneficiaries. A trust is far less likely to end up with legal challenges after your death.
Keeping the Distribution Private
If your estate ends up in probate court, it becomes part of public records that anyone can access. If your estate has a living trust, the distribution of your assets remains private.
Providing Peace of Mind
With a living trust in place, should you end up becoming incapacitated before your death, you will have the peace of mind of knowing that your beneficiaries and estate distribution will occur according to your wishes. You will not have to worry about a judge trying to interpret your wishes.
To consult with an experienced trusts and probate lawyer today
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Understanding the Terminology Involved with a Living Trust
There are quite a few aspects to understanding how a living trust works. The terminology can be a little confusing for someone who is not familiar with the process.
Other Names for a Living Trust
Some attorneys refer to a living trust as a revocable trust, a revocable living trust, or a trust agreement. The term revocable applies because the person who owns the living trust can make changes to it or even end it before passing away, as long as the person who owns it is mentally able to handle this.
Parties Involved in a Living Trust
Some of the people involved in setting up and managing the living trust include:
- Grantor: This is the person who creates and owns the trust. Technically, an attorney will create the document, but the grantor is the person who owns the assets or estate.
- Trustee: This is the person who manages the trust assets while the person who owns the living trust remains alive. The trustee manages money and assets in the trust, including paying bills, paying creditors, and making investment decisions.
Understanding Who Can Serve as a Trustee
You, as the grantor of the living trust, also can serve as the trustee for your trust, as long as you have the mental and physical capability to do so. If you and your spouse own the trust together, you can serve as co-trustees.
When serving as your own trustee, you still must follow all of the laws and regulations required of anyone who would serve as a trustee.
Allowing Someone Else to Serve as a Trustee
A friend, a relative, a bank, or a trust company can serve as a trustee, if you prefer.
When a third party is serving as the trustee, which is required when the person who owns the trust is incapable of managing the trust, the chance for fraud exists. The person who owns the trust must be able to count on the honesty and integrity of the trustee.
The Consumer Financial Protection Bureau (CFPB) publishes information to help trustees understand the laws and rules for managing a trust in Florida, helping the trustee make the proper decisions.
We Can Help You Set Up a Living Trust
A living trust is a legal document that offers an alternative to a traditional will, allowing the trustee to manage the assets until the death of the person who owns the assets. A living trust allows assets to be transferred quickly to the beneficiaries, as specified in the living trust.
For many people, setting up a living trust is an option for handling the passing of assets to family members or other recipients upon your death. However, it may not be the best solution for everyone.
Contact Bogin, Munns & Munns to start the process of setting up a living trust or of performing other aspects of estate planning. Our team knows the importance of preparing your estate for your beneficiaries, and we treat our clients like family.
Call us today at (407) 578-1334 to start the process.
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