Articles Posted in Estate Planning

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Attorney-in-Fact:

The person selected to have the authority to act on the behalf of a principal. An attorney-in-fact can be any adult that the principal selects. (He or she need not be a Florida lawyer.) Typically, people appoint an attorney-in-fact in a power-of attorney, granting the attorney-in-fact the power to transact business (enter into agreements, contracts, make transfers of property, etc.) in accordance with the power-of-attorney. The authority of the attorney-in-fact cannot last beyond the life of the principal. In most cases a power of attorney expires if the principal becomes disabled or incapacitated. Florida allows for a Durable Power of Attorney that can become effective upon a disability, an occurrence of an event, or at the time that the document is signed. Florida law provides that a durable power of attorney is not impacted by a persons subsequently disability. The agent can also use this power to help the principal qualify for Florida Medicaid.

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Annual Gift Tax Exclusion:

Each person has an annual gift tax exclusion of $12,000 annually free of gift tax if it is a gift of a present interest such as cash, tickets to Jacksonville Jaguars football game that are currently being given or a new car. If you are not giving the current right to enjoy the property and giving up complete control of it unless an exception applies such as a Crummey power for an irrevocable life insurance trust there will not be an exclusion and the value of the gift will use up part of the individuals applicable exclusion amount or if it has been used subject them to gift tax. A husband and wife can elect to split gifts for a year and are then able to give $24,000 to an individual in a year for gifts of a present interest with no tax. Other then spouses who are not US Citizens or residents spouses can give one another an unlimited amount of gifts of any type of interest during their lives and it will not be taxable at that time.

In addition, an individual is able to pay for the education and healthcare costs of their children and grand children. For these payments to qualify, the person must make the payments directly to the school or medical facility or health insurance company, if the funds go through the child, the will not qualify.

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Summary

A Florida revocable trust can be a helpful estate planning tool. It retains flexibility while the grantor is alive and has capacity and allows for them to name a trustee who will handle their affairs if they were to loose capacity or when they die and helps avoid probate in Florida. The technique is not for everyone though and you should discuss the various Florida estate planning options of a will to pass on your property, a revocable trust and in large estates that would be subject to estate taxes possibly additional irrevocable trusts and other estate planning techniques would also be appropriate. With full knowledge of your specific facts and what you would like to do with your property after meeting with a trust attorney they can help and offer advice regarding your situation and which documents would be most appropriate for you.

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Testamentary Trusts

A testamentary trust in Florida is formed through a provision in a will and does not come into existence until a person dies.
It does not help if someone becomes incapacitated although hopefully that person will have a power of attorney to handle their financial affairs otherwise a guardianship would likely be required. A testamentary trust does not avoid Florida probate. It would need to go through probate and after all costs and delay of probate had been wrapped up and all valid creditor claims had been paid then the trust could be funded and operate.

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3. What Are some disadvantages of Florida Revocable Trusts

Re-Registration of Property and Changes to Beneficiary Designations

In order for the trust to ensure the continuity of management of the assets and Florida probate avoidance the trust must be funded through a process of retitling assets of the estate. Depending on if there is a change in beneficial interest, there may be fees due when the new Florida Deeds are filed. If there is no change in the beneficial interest there are no additional document taxes due.

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2. What are the general advantages of revocable trusts?

Continuity of Management During Disability

Creating a Florida revocable trust is probably the best way to ensure that your property remains available to be used for your benefit, should you become physically or mentally incapable of managing your own affairs. While continuity of management is also possible when a Florida durable power of attorney is signed, third parties such as banks, brokers, and transfer agents often have more difficulty in dealing with a durable power of attorney than with a trust and do not always accept the authority of the agent.

If you become disabled and you have neither a revocable trust nor a durable power of attorney, (power of attorneys are controlled in Florida by the Florida Durable Power of Attorney Statute 709.08 an expensive, lengthy, and potentially embarrassing court proceeding is generally required to appoint a guardian before your property can be used to benefit either you or your family. Even after a guardian has been named, continued court supervision over the management of investments and disbursements is usually required. This can include annual bond fees, annual accounting, and additional legal, accounting, and other professional fees. It was also require a restricted depository account in which the court must approve of the transactions from.

Flexibility
Using a funded revocable trust may allow you to name unrelated, out-of-state individuals and out-of-state trust companies to act as the primary administrator of your property at death. Without a trust, Florida and other jurisdictions limit your flexibility in this regard. To serve as a non corporate Personal Representative in Florida a person must be a Florida resident or a close family member (as defined by Florida Statute) of the Florida decedent
Avoiding Florida Probate
Because Florida probate can be costly and time-consuming, the avoidance of probate in Florida is often cited as one of the primary benefits of a revocable trust. Depending on the assets that are funded in the Florida Trust may determine how great a benefit avoiding probate may be. If you own real estate in more than one state such as in Florida, California and Pennsylvania you can avoid multiple probate proceedings. If the decedent was a Florida domicile and owned property in Southern California, another piece of real estate in Philadelphia, and also owned real estate in Manhattan New York for example then putting the real estate in the trust can help avoid a California Ancillary Administration, avoid New York Ancillary Probate as well as helping to avoid Ancillary Probate Administration for the Pennsylvania property. The property can be distributed to the beneficiaries in a quicker manner and with far less administration costs.
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FLORIDA REVOCABLE TRUST STRUCTURE

A Florida revocable trust is created when an individual (typically called the grantor in Florida but also known as settlor, or trustor) signs a trust agreement naming a person(s), a corporation, or both to administer the trust (the trustee or corporate trustee). In Florida and many other jurisdictions the Grantor can also serve as a trustee, the grantor and the trustee can be the same person. Generally a grantor does serve as the initial trustee of their revocable trust and then names a few successor trustees two or more of whom may serve as successor co trustees in order to insure continuity of management in the event of death or disability.

Naming a corporate trustee rather than an individual ensures that a competent and experienced trustee will always be available to act in the grantor’s interests and upon his or her passing assisting the Trust Beneficiaries with the trust administration. Florida Trust Statutes requires a corporate trustee when the assets of the trust are in excess of ten million dollars.
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1. What is a Florida revocable trust?

A Florida Revocable Trust is a trust that is prepared by a Florida Grantor or sometimes know as a Settlor who is domiciled in Florida and the trust can be altered, amended or revoked. A revocable trust may also be known as a Florida living trust or a revocable living trust. Prepared by a Florida grantor or settlor the person making the trust for their property they would be known as a Florida living trust or a Florida Revocable living trust.

A Revocable Trust is a technique a that can be used for administration of assets both during the grantor’s lifetime and after death.

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