Could Your Florida Estate Plan Benefit from a Revocable Living Trust?
Pros & Cons of Using Revocable Living Trusts for Florida Estate Plans
A revocable living trust is an entity formed to hold your assets, property, and other relevant possessions on your behalf. There are many reasons to consider using a revocable living trust as a part of your Florida estate plan. For instance, they make it easier to transfer those assets on to your beneficiaries upon your passing. Because of the risks and complexities involved in setting up a revocable living trust, it’s imperative that you do so with a professional’s assistance – those “do-it-yourself” estate planning websites just aren’t going to cut it.
Revocable Living Trust Advantages for Florida Estate Plans
Individuals in Florida interested in setting up a Revocable Living Trust could stand to benefit in the following ways:
Useful for Avoiding Probate
Probate court can add significant stress to an already painful time in your beneficiaries’ lives. It’s expensive, takes a long time, and only gets more complicated if you own assets in other states. Having a revocable living trust as a part of your Florida estate plan, however, can potentially eliminate the need for probate proceedings altogether. Even placing a portion of your belongings into a revocable living trust can reduce the time and money that your beneficiaries will spend in court.
Lowers the Risk That You’ll Need to Go Out of State for Ancillary Probate
If you own property outside of your home state, then you’ll need to go through ancillary probate after your initial probate proceeding. Florida probate courts only have jurisdiction over assets located within the state. For example, if a Florida resident who owns a home and a car in New York passes on without a trust or a will, then ancillary probate will be necessary before anyone can claim the vehicle or the property. If the deceased had placed that property into a revocable living trust, however, then it would have passed to the beneficiaries without incident.
Appoints Your Chosen Guardian in Case of Incapacitation
If you find yourself incapacitated or otherwise unable to communicate or take care of yourself any longer, but never took the time to draft a will or fund a revocable living trust, then the state will appoint a guardian to manage your property and other assets. Having a stranger in charge of your loved one’s possessions can be emotionally taxing on your family and should be avoided if at all possible.
If you have a revocable living trust as a part of your Florida estate plan, then guardianship can be circumvented altogether by naming a successor trustee who can take over should anything happen to the grantor. This is similar to a power of attorney, but with greater flexibility and reliability.
Makes Transferring Assets Easier
A revocable living trust also makes it easier to transfer your estate to your beneficiaries upon your death. Without a trust or a will, your surviving friends and family members will be forced to take the initiative and petition the court to have a representative appointed to manage your estate. There’s no guarantee that the representative will distribute your property in line with your desires, and the whole process can take a frustratingly long time to complete. By appointing a trustee for a revocable living trust as a part of your Florida estate plan, your loved ones can take possession of the assets they need most that much faster.
Protects Your Privacy
Probate court is a public proceeding, which means that everything that takes place in the courtroom will be recorded and preserved as a part of the public record. While Florida probate law has some restrictions on who can access these records, they don’t provide absolute protection or confidentiality during a sensitive time in which your family certainly could use a little extra privacy. If you have a revocable living trust, then the appointed trustee only needs to file a notice of trust in the relevant county. This notice contains limited information meant to alert potential non-trust beneficiaries to the trust’s existence.
Revocable Living Trust Disadvantages for Florida Estate Plans
There are, of course, some potential disadvantages for using a Revocable Living Trust as a part of your estate plan, such as the following:
One disadvantage to structuring your Florida estate plan around a revocable living trust is that it’s probably going to cost more to set up than a traditional will. Your attorney is likely to charge more because of the extra work involved, and there are ongoing expenses that you’ll need to stay on top of as well. It costs money to retitle assets, which you’ll need to do whenever you acquire new property or change financial institutions.
Florida estate plans employing revocable living trusts also require more work to maintain than a traditional will. It’s a more complex process that takes more than meeting with your counsel for an afternoon of signing paperwork. A revocable living trust is only useful if it holds most, if not all of your property upon your passing. Otherwise, your possessions might end up in probate anyway. After your trust is set up, you’ll need to transfer any assets that you want to protect to that trust, which takes time, money, and more paperwork. Moving assets out of a trust can be complicated as well, which can make things difficult if you decide to gift something to a friend or family member that was previously placed in the trust’s name.
Some Asset Restrictions
Not all assets are eligible to be placed in a revocable living trust. For example, some property may be subject to transfer restrictions or other agreements. Retirement accounts are off-limits, too. Other assets will require regular maintenance in order to make sure that they pass on to the desired beneficiary. Because of this, it’s important that your attorney has a full and complete understanding of the assets in your Florida estate plan and how you want them to be distributed upon your passing.