A Florida Revocable Trust is a useful estate planning tool. They can be used for many functions including disposition of one's assets upon death. In my practice I use Florida Revocable Trust for the purchase of Class 3 items which are controlled by the NFA, to provide for pets and animals after death, and to hold assets. Each type of Florida Revocable Trust has unique language and purpose.
In addition there are several benefits in using a Florida Revocable Trust to dispose of property over a will. These include the following:
1: No Florida Probate is required for assets that are in a living trust at the time of death. Although this is the most common reason people use a Florida Revocable Trust it is not the only reason. Many times there are other ways of accomplishing the same results with payable on death designations or having assets held in the name of more than one person. Other property such as retirement accounts, life insurance and those with beneficiaries will pass to your beneficiaries on their own without a Florida Probate.
When property is transferred by your Florida Will to a living trust, a Florida Probate is still required.
Florida now requires the trustee of a living trust to file a notice of the trust with the appropriate court containing information about the person who created the trust and the trustee. In some cases the trust is filed in the probate proceeding because they are responsible for paying clams of the creditors and the creditors must be given notice of this.
2: Instruction. Some trusts are used to provide the beneficiaries with instructions or notice that they would otherwise not have available to them. One example is the Florida Gun Trust. One of the benefits of a Florida Gun Trust is that the beneficiaries and successor trustee's are given information on what laws they must comply with and how to avoid criminal and civil liabilities associated with improper actions.
3: Privacy. As mentioned above, when a person dies with a Florida Will, an inventory must be filed with the court. You may not want your friends, neighbors, or the media to be able to read a listing of what you own and what it is worth. After all, an inventory is a public record. With a living trust, your properties and their values remain private.
4: Constitutional Rights. Some trusts like the Gun Trust or NFA trust allow individuals to maintain their right put purchase items that would otherwise not be permitted under some state laws.
5:Future Incapacity. When one becomes incapacitated, their finances can be dealt with by their successor trustee. This can avoid the unnecessary costs associated with the invalid rejections associated with a Power of Attorney. In can also avoid the necessity to establish a Florida Guardianship.
6: Harder to Challenge. When you make an unequal distribution among your heirs they might not be happy and want to dispute your wishes. A Florida Revocable Trust can shorten the time to dispute distributions and the time in which someone has to complain about the outcome. When proper notice is given, individuals only have 6 months to bring an action.
7: Easy Modification. When retirement accounts or many assets are pointed to a Florida Revocable Trust the trust can be changed without some of the restrictions that are typically placed on accounts. Often if is difficult to remove someone from retirement or benefits accounts, but there is no approval process associated with the modification of a Florida Revocable Trust.
8: Ancillary or Out-of-state Probate. Property owned in another state is normally subject to a second probate or ancillary probate. If the a trust owns the property an additional or out of state probate can be avoided.
Everything is not positive with a Florida Revocable Trust and there are some downsides you should consider.
1: Cost. A living trust can cost more than using other methods.
2: Time-consuming to Fund properly. Depending on how many different types assets you have, proper setup of a living trust can take time and cost money to move the assets to your Florida Revocable Trust
2: More Complicated. Unlike with a Florida Will which you only have to change with there is a life event that causes you to reevaluate your wishes, a Florida Revocable Trust assets need to be maintained within the trust. Much of this can be transparent, but it takes a conscious effort to realize when you receive assets that are not in the trust, and transfer them to the trust. In addition, some families require more than one trust and this can increase the level of complexity.
3: Medicaid ineligibility. Transfers to a Florida Revocable Trust can create a period where one is ineligible for Medicaid benefits. Although this can be resolved by revoking the trust, there may be some additional time and expenses associated with this process. This is more of an issue with older individuals but you never know when it might affect you.
4: Time-consuming to Revoke. Although living trusts can be easily amended, the same effort that was involved in creating them is associated with revocation.
5: Probate or additional costs after death. If you have a taxable estate there will be tax returns and other costs associated with death. With a trust there may be an additional set of returns that are due and this could be more than the savings on probate. You should consider this when you are looking to save costs associated with a Florida Probate.
6: Probate?. If you leave assets in your personal estate you will still need to do a probate. Although the cost of the probate may be significantly lower the time delay and work associated with of the administration of a will.