Revocable Trusts In Florida Estate Planning: Types And Benefits For New Residents

The estate planning process can be complex. Many people delay creating their estate plans or updating them after major life events. However, keeping your estate plan up to date with your stage in life, your state of residence, and applicable laws can help to ensure that you will be cared for in case of incapacitation and that your assets will go to beneficiaries according to your wishes. To avoid potential disputes over revocable trusts in Florida after relocating from another state, add updating your estate plan to your moving agenda. If you are a new resident, consider calling (561) 677-8384 to speak with an experienced Florida estate planning attorney at Loughlin Law, P.A., to learn more about your options.

Revocable Trusts in Florida

Revocable trusts in Florida, also called revocable living trusts or living trusts, can be altered, amended, or revoked any time the grantor deems necessary. These changes may be made as long as the grantor is still living and is not incapacitated. The grantor of a revocable trust retains control during his or her lifetime over any assets that fund the trust. According to The Florida Bar, the grantor may name himself or herself as the trustee. However, a successor trustee, such as an attorney or trusted friend or family member, must also be named to take over the duties after the grantor’s incapacitation or death. Upon the grantor’s death, the trust becomes irrevocable, and the trustee distributes the assets to the designated beneficiaries according to the terms of the trust.

If a revocable trust was established as part of an estate plan in another state, it is important to change the situs of the trust after moving to Florida. Reviewing the trust will help to ensure that the terms are compliant with Florida laws, minimizing potential tax liabilities. Other amendments to make to the trust after moving from one state to another may include changing the assets, naming different beneficiaries, or appointing a local trustee who can perform his or her duties in the new state. A simple modification may be all that is needed. However, some situations may call for revoking the trust and setting up a new revocable trust in Florida.

Benefits of Revocable Living Trusts for New Florida Residents

Revocable living trusts in Florida have several notable benefits and may be worth the investment in time and money. New Florida residents may want to take the time to ensure that their estate planning documents are not only up to date with current assets and beneficiaries but also compliant with state law. Whether it is updated or new, a revocable trust may offer the following benefits:

• Avoiding probate: The assets within a trust do not have to be probated. If all of the assets in a person’s estate were used to fund the trust, probate may be completely avoided. This can save money from court fees and time from completing the probate process, which may be lengthy. Avoiding the public probate process also protects a family’s privacy
• Being flexible: A revocable living trust offers flexibility. Unlike an irrevocable trust, the terms and assets within a revocable trust can be modified by the grantor as needed. The trust can also be revoked in its entirety, as indicated by its name
• Managing assets: A revocable trust may preserve assets to ensure that they are distributed to the beneficiaries according to the grantor’s wishes
• Providing for dependents: If a grantor has minor children or dependents with special needs, a revocable living trust may protect the assets within it to be used for the care of those dependents
• Paying taxes: Although a revocable trust does not protect against income taxes (while the grantor is living) or federal estate taxes (after the grantor’s death), potential tax benefits may be available for the beneficiaries

Disadvantages of Revocable Living Trusts in Florida

Revocable trusts in Florida, though often chosen for their flexibility and potential for allowing the grantor’s estate to circumvent the probate process, can be complex. Several aspects of living trusts may be considered disadvantages and should be considered carefully during the estate planning process. A knowledgeable Florida estate planning attorney at Loughlin Law, P.A., may be available to help determine whether your estate plan should include a revocable trust.

Paying for the Trust

When compared to simply preparing a Last Will and Testament (will), adding a revocable trust may involve additional attorney fees. Other costs may also be required, such as a trustee fee.

Funding the Trust

All assets that will fund the trust must be legally transferred to the trust. This process can be time-consuming and involve more fees for retitling real estate deeds, transferring financial accounts, and other necessary activities.

Needing a Will and Probate Even With a Trust

A person may still need a will to ensure that the entirety of the estate will be distributed according to his or her wishes. The will may be written to cover any assets that were not used to fund the revocable trust or that were acquired at a later date and never added to the trust. If there are any assets outside the trust, the balance of the estate must be probated, with or without a will.

Paying Taxes Despite the Trust

One reason people may choose a trust as part of their estate plan is to avoid paying certain taxes. However, the grantor of a revocable trust must pay income taxes on the trust during his or her lifetime. Upon the grantor’s death, if the value of the assets in the trust exceeds the filing threshold, according to the Internal Revenue Service (IRS), federal estate taxes may apply. The state of Florida does not have an estate tax.

Paying Creditors From the Trust

Because the grantor of a revocable trust retains ownership of the assets within the trust, those assets are not protected from creditor claims. Only irrevocable trusts, which are separate entities that legally own the assets, protect a person’s assets from creditors. Revocable trusts become irrevocable only upon the incapacitation or death of the grantor.

Losing the Trust

A trust document is not filed with the court. Instead, the grantor, trustee, successor trustee, and the attorney who prepared the document may retain either the original or a copy. The document should be kept in a safe place, such as a safe deposit box. If the document is lost, and no copies can be found, the grantor may need to revoke the lost trust and create a new one.

Contact a Florida Estate Planning Lawyer for Help Today

Because estate laws may vary from state to state, wills and revocable trusts in Florida may have different legal requirements than in another state. If you are a new resident, you may need to review your estate plan to ensure that your wishes will be carried out upon your incapacitation or death. For help updating your will and trust documents, consider contacting the Florida estate planning legal team at Loughlin Law, P.A., by calling (561) 677-8384 to schedule a consultation.