Transferring assets to your beneficiaries can be made a lot easier by using a living trust. A living trust gives you the ability to transfer assets into a beneficiary’s trust while you are alive. You get to continue using these assets, and they are distributed to your beneficiaries after you pass away. Due to the many benefits they afford you, living trusts have become an appealing estate planning option for many people.
Creating Living Trusts in Florida
When you create a living trust, you become that trust’s grantor. This means you get to decide the terms of its creation and distribution, and you get to add assets to it as well. You also get to choose a trustee who will manage the assets.
To avoid Florida trust appeals, many people choose to make themselves the trustee. This is because no one can sue you for using or mismanaging your own assets because that is what is contained in the trusts you create. That said, you can pick anyone you like as the trustee.
If you choose yourself as the trustee, you also need to appoint a successor trustee. The successor trustee is responsible for the trust after you pass away.
Items That You Cannot Add to Your Trust
The law does not usually let you add your home to your living trust. To do this, you need to add special language to the trust agreement. Also, Keough plans, 401(k)s and IRAs can never be added to a revocable living trust.
Revocable and Irrevocable Trusts
You can change a revocable living trust at any time you are alive. It becomes irrevocable once you pass away. An irrevocable trust cannot be altered under any circumstances.
It is, however, important to know that if you pass away without a trust or a will, the law takes over and your assets become subject to state intestacy law, which allocates a percentage of your assets to your relatives.
Benefits of a Living Trust
One major benefit of living trusts is that assets placed in this trust do not go through the probate process. A living trust provides all details on what will happen to your assets and if you have one, you do not need a will or probate process for the assets to pass to your beneficiaries.
Another benefit is that a living trust saves you time and money. The probate process can take months and cost quite a bit, and a living trust helps you avoid all this.
Other Things to Note
All living trusts are liable for the grantor’s debts. Debtors have two years to claim their debts and a trust cannot be paid out while those claims are pending. If probate is filed, this restriction is done away with, and there is only a three-month wait.
Florida has also simplified the probate process for estates below $75,000. If you own a home in Florida, however, you might not qualify for this provision.
A living trust is one of the best ways to control your assets when alive. It is also a good way to ensure there are no problems when you pass on, and your assets are distributed to your beneficiaries according to your wishes.