Living Trust / Revocable Trust

December 1, 2006

Florida Trust Law Information part 1

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.

October 7, 2006

Florida Estate Planning & Digital Assets

by David M. Goldman

A new problem has begun to surface in Florida Estate Planning. What happens if you use email, or other online services? Will your loved ones be able to act upon your behalf if you are incapacitated or unable to act on your own?

October 1, 2006

Types of Trusts: Your estate is a matter of trust (and not just for the wealthy)

by David M. Goldman

For an understanding of Estate Planning you might read an article for some background. Mark A. Cline has written an article about the value of trusts for Megayacht news online where he talks about Trusts not only being for wealthy individuals. I am not sure any people who are not wealthy will be reading Megayacht news, but thought that others might find the article interesting.

He does a good job of explaining the various terms of trusts like the grantor, beneficiary, and trustee. In addition, he makes the point that ” these documents (trusts) protect your assets and carry out your wishes in the event that you cannot.” Here is the link to the article
For those who like this article you may also want to read his article on Estate Planning (wills, trusts, or both)

September 21, 2006

Estate Planning for Widows

by David M. Goldman

A firm in Dallas has created a program to help widows deal with financial planning. They state that the average age of a widow in America is 56 and that offen estate planning was not created to provide for widows as they need. They do a preliminary evaluation and work on restructuring estates to provide the necessary cash flow to last for the remainder of the spouses’ lives. See the above link for more details. They may be able to help or refer you to someone in your area who can provide similar services.

September 11, 2006

Estate Planning: Wills

by David M. Goldman

With a Florida Wills you can appoint guardians for your children and arrange to manage their property for them until they’re legal adults. Making a will is a critical first step in your plan.

But in Florida a will must go through the probate process, a lengthy and expensive court procedure in which a judge determines that your will is valid and supervises the distribution of your property. In most Florida counties including Duval, Clay, and St. Johns it can take 6 to 18 months and cost up to 3% of your non exempt portion of your estate. There can be additional fees for dealing with non-probate assets (that includes your Florida Homestead when you die, even if the bank really owns it).

If you have a house worth $300,000 and $200,000 worth of other assets, probate costs could be close to $7,000 and could easily be even higher. An estate of 500,000 could be looking at fees around $15,000. You can avoid probate costs by establishing a Florida Living Trust, Make sure you use a Florida living trust attorney to ensure that you comply Florida laws and regulations.

September 9, 2006

Probate and Estate Terms

by David M. Goldman

Florida Trust Terms

Crummey Letter A written notification to the beneficiaries that contributions of money — typically to an irrevocable life insurance trust — have been received on their behalf. The beneficiaries then have a period of time to withdraw the funds. If the beneficiaries do not withdraw the money, they are regarded as having received a gift. The funds can then be used to pay the premium on insurance on the grantor’s life. Use of a Crummey Letter can avoid certain potential tax problems arising from the gift of a future interest.

Grantor: The designation for a person who is transferring their property through a trust or a deed.

September 2, 2006

Florida Spendthrift Trust

by David M. Goldman

Florida law specifically authorizes Spendthrift provisions in a revocable living trust or irrevocable trust. A spendthrift clause in a trust prohibits transfers of a beneficiary’s interest in the trust. In some jurisdictions, all income interests are automatically given limited spendthrift protection meaning that they cannot be transferred by a beneficiary or reached by his creditors unless a provision is inserted in the trust document allowing such transfers. If there is no provision allowing the beneficiary to transfer his interest, it can be reached: by a creditor that furnished necessities such as food, clothing, shelter, or medicine; in suits to enforce child support or alimony; to collect a federal tax lien; to the extent of income beyond that reasonably needed by the beneficiary for support and education; and by creditors who have a judgment against the beneficiary and can levy upon 10 percent of the income due. There is no spendthrift protection where the trustor is also the beneficiary.

August 30, 2006

Life Insurance Proceeds, Retirement Plan Benefits

by David M. Goldman

A trustor can name the trustee of a living trust or of a testamentary trust created in a will as beneficiary of his life insurance proceeds. However, if the trustee of a living trust is named beneficiary, the trust must exist at the time that the beneficiary is named. These principles also apply to retirement plan benefits.

August 29, 2006

Florida Revocable Living Trust

by David M. Goldman

In many jurisdictions, Florida revocable trusts cannot be revoked unless the trustor expressly retains the right to revoke. Revocable living trusts allow a trustor to manage his assets, to plan for his incapacity, and to avoid probate. The beneficiary of the Living trust or Revocable Living Trust gains interest in the assets during the trustor’s lifetime and gains possession upon the trustor’s death.

A trustor can devise assets in his pour-over will to the trustee of his revocable living trust or to a trust created by someone else. Such a devise is known as a pour-over gift and is valid only if the trust was in effect prior to the will or was created at the same time as the will. The pour-over gift is made to the trust as the trust exists at the trustor’s death, which includes any amendments made to the trust after the will is executed.

August 13, 2006

Living Trust: Florida Estate Planning Basics

by David M. Goldman

You can avoid probate in Florida, and pass your property to your children within only a couple of months by creating a Florida Living Trust. A Living Trust is a legal entity that is separate from you as an individual. You transfer title to your major assets to this trust-like your house and your brokerage accounts. During your lives, you and your spouse serve as the trustees of the trust, which gives you the power to buy, sell, and otherwise transfer any of the assets in it. When both of you die, the assets in the trust are transferred to the beneficiaries of the trust, usually your children, without going through probate at all.

Though it costs some money now to set up a Living Trust, and takes some time to manage it, it costs about 1/10th of what the probate process will cost your estate and allows you to craft an estate plan that maximizes what you’ve got for the people who need it most, your kids.