A living trust is a legal document that allows you to specify how you want your personal and financial affairs to be managed during your lifetime and after your death. It is called a “living” trust because it is created while you are still alive, as opposed to a testamentary trust, which is created after your death through your will.
A living trust can be amended or revoked at any time as long as you are competent to do so. This means that you can change the trust as your circumstances and needs change.
During your life, you can act as the trustee of your trust, meaning you have complete control of the assets within the trust. You will determine in your will who the beneficiary or trustee will be after death.
Benefits of a living trust
Protect minor beneficiaries if something happens to you
One of the primary benefits of a living trust for many of our clients is protecting their minor beneficiaries from inheriting before they are mature enough to handle it. This means putting certain guardrails in place so that no beneficiary can inherit before they reach the age of maturity (we like age 25 because there is some science behind that age). Without a trust, the default age for inheritance is 18. Finally, your minor beneficiaries will be able to draw on their trust for health, education, maintenance, and support. This means they will never go without.
A living trust can help you avoid the costly and time-consuming probate process. Probate is the legal process of distributing a person’s assets after death. It can be lengthy and expensive, especially in Florida, where the probate process can take several months or even years. With a living trust, your assets will be transferred to your designated beneficiaries upon death without probate court supervision. This means that your loved ones will have faster access to your assets and can avoid the stress and expense of the probate process.
Protect your privacy
If you’re a person who likes their privacy, you don’t want to go through probate. The probate process is a matter of public record, meaning anyone can access information about your assets and how they are distributed. A living trust, on the other hand, is a private document, and the details of your trust are not made public. This can be especially important for those who want to keep their financial affairs confidential.
Setting up your living trust
Once you have a living trust in place, you will need to transfer ownership of your assets to the trust by either assigning ownership rights, transferring title, or naming your trust as a beneficiary on your assets. For example, you may wish to deed your home or investment properties to the trust and/or make the trust the beneficiary on your life insurance policy.
An experienced estate planning attorney like myself can help you set up a living trust and ensure everything is in order as required by law. With a living trust in place, your assets, investments, and loved ones are secure and taken care of in life and after death.