There is often no shortage of advice from friends and family in conversations about estate planning. Residents of Florida who have related questions may find more value in the advice provided by professionals. Living trusts are often recommended, but different factors must be considered before creating such a trust.
A revocable trust — or living trust — is created during a person’s lifetime to help with managing and protecting his or her assets in the event of illness, disability or age-induced challenges. Although living trusts can avoid probate, they are revocable and can be changed or canceled at any time while the grantor is alive. However, because they are revocable, they will be included in the estate and incur estate taxes. In contrast, irrevocable trusts — which cannot be revoked or modified — are exclusively created to avoid probate and estate taxes.
A living trust has a trustee to manage it — often the creator of it, until his or her death, at which time an appointed trustee will take over. Such a trust also owns property, which the grantor transfers during his or her lifetime. As with a will, a revocable trust can indicate the grantor’s wishes for how to distribute the assets upon death. However, it can also be used to continue the management of the trust after the grantor’s death. An appointed trustee can continue management to benefit heirs until they reach predetermined ages or goals established by the grantor.
An appointed trustee can also manage a trust if the grantor can no longer do it due to incapacity. Drafting trusts, regardless of whether they are revocable or irrevocable, is a complicated process that is typically best done with professional guidance. Florida residents can seek the support of an experienced estate planning attorney to answer questions and explain the pros and cons of the various options before helping to establish the most appropriate estate documents for the client’s circumstances.
Source: americanbar.org, “What is a Revocable Living Trust?“, Accessed on April 13, 2017