Articles Posted in Irrevocable Trust

a Florida Revocable Trust is a trust created during the life of an individual which can be modified, amended, or revoked at anytime during their life. Often they are used to:

1. avoid Florida Probate;

2. Keep your assets and decisions private;

3. Simplify after death distributions;

Spendthrift clauses can be confusing to trustees. The general idea with a Florida Spendthrift clause is that the beneficiaries cannot assign their interest in the trust to a creditor ( voluntarily or involuntarily)

Here is the test found in a typical clause under the new Florida Trust Code

Spendthrift Provisions. Each trust created by this Trust Agreement shall be a spendthrift trust to the fullest extent allowed by law. Prior to the actual receipt of trust property by any beneficiary, no property (income or principal) distributable under any trust created by this Trust Agreement shall, voluntarily or involuntarily, be subject to anticipation or assignment by any beneficiary, or to attachment by or to the interference or control of any creditor or assignee of any beneficiary, or be taken or reached by any legal or equitable process in satisfaction of any debt or liability of any beneficiary, and any attempted transfer or encumbrance of any interest in such property by any beneficiary hereunder prior to distribution shall be void.

The most common application of a Spendthrift Provision is to protect against involuntary assignment or bankruptcy.

When creating a revocable trust you may be asked for a Employment ID number (EIN) or Tax ID to open the account or fill out the paperwork. Many banks do not understand the difference between a revocable and a irrevocable trust. Although irrevocable trusts require TAX ID or EIN’s revocable trusts do not require them.

When this happens to you, it may be difficult to get them to understand why they do not need this information. It is best to just fill out that section with your social security number – which is your Tax ID number.

If you have questions on a Florida Revocable Trust you should Contact a Florida Estate Planning Lawyer.

Often the first thing that comes to mind with Florida Estate Planning is a Florida will or Florida living trust. Although these are valuable documents they do not have any effect on the distribution of many assets.

We recommend that our Jacksonville residents make sure their beneficiary designations are updated as these control the distribution of many assets. When a Florida Living Trust is part of an estate plan, you can designate your trust to be the beneficiary of most assets. It is important to make sure that the trust is the proper beneficiary. With some assets like retirement plans, you may not want your trust to be the beneficiary as it can have adverse consequences when charities are named as beneficiaries of the trust.

Your beneficiaries need to be updated on a regular basis and in the event of a life event (birth, death, marriage, divorce…). We recommend naming contingent beneficiaries in these documents.

There have been many revisions to Florida’s Trust Code and I have touched on some of them on this blog in the past.

There have been major changes to creditors rights. Creditors cannot compel distributions from or attach or otherwise reach a beneficiary’s interest in a third party discretionary trust whether or not:

1) The trust has a spendthrift provision;

2) The discretion is subject to a standard; or 3) The trustee has abused the discretion.

This clarifies many issues with Florida Trusts.