Revocable Living Trusts
Revocable Trusts or Revocable Living Trusts in Florida should be considered the same thing. In Florida, a trust is an agreement between a grantor and a trustee where property is transferred to the trustee by the grantor to provide for a beneficiary.
What is fascinating about a trust is the incredible flexibility available to you in crafting your estate plan under Florida law. You really are only limited by your imagination as to what your trust will accomplish.
For example, many of our clients hire our firm because they are concerned about probate in Florida and want an estate plan that avoids probate. You can easily minimize your exposure to probate expenses by creating a revocable living trust and properly funding it.How does a trust avoid probate?
By transferring legal ownership of an asset from the grantor to the trustee, legal title passes from the grantor. When the grantor dies, he or she doesn’t actually “own” the asset and so there is no need for probate to transfer title since the asset is already owned by the trust.What is “funding a trust”?
All too often we see people who have created a trust in Florida, but failed to properly fund the trust. If a trust was created to avoid probate, but if it was never properly funded then there is a failure of purpose. So to fund a trust you need to change the ownership of the asset from the grantor to the trustee. Our attorneys can explain to your how to properly title your assets so they are owned by your trust. This is not a difficult process and it is essential to meet your probate avoidance goal.Why probate avoidance?
Probate is a public process that takes time and involves expenses in Florida. A probate action in Florida is part of the public record so anyone can see what assets you had and where they went. Additionally, it is much easier for a disappointed relative to file an objection to a will or cause other difficulties to your estate’s administration in a probate proceeding versus trust administration.Is probate that expensive in Florida?
The expense of probate depends, in part, on legal fees. Legal fees for probate in Florida are set by statute and generally are no more than 3% for the first million dollars in assets in the estate with a percentage decreasing as the estate value increases. The fee for the personal representative is generally the same as that of the attorney. Doing the math, you can see how this can get expensive quickly. Beyond a certain asset base the cost of creating and funding a trust is offset by the potential future costs to the estate for legal and personal representative fees. If we are only considering probate costs we suggest to clients that a trust may not be needed at an asset base below $300,000.00. Between $300,000.00 and $500,000.00 a trust is worth some consideration and above $500,000.00 it may be a good idea. Your situation is unique to you and no matter what your asset base, you should speak with one of our attorneys for advice.Should I avoid probate?
It is not always possible to fully avoid probate in Florida. We tell our clients they should focus on minimize their probate expenses versus complete avoidance. It is a grim life to be excessively concerned about probate and there are frequently minor assets that didn’t make it into the trust. Also, the probate process offers an accelerated statute of limitations for creditor claims which should be seriously considered even if your estate living trust in place.