What are the Different Types of Revocable Living Trusts?
Different Types of Revocable Living Trusts in Florida
A revocable living trust is an entity separate from yourself that you create to make transferring property and other estate planning matters a little easier upon your death or incapacitation. As the name suggests, this trust can be dissolved or “revoked ” at any time, which means that the grantor has significant flexibility when it comes to managing the trust. But that flexibility doesn’t end there – your revocable living trust can be tailored to meet any number of needs, which we’ll get into below.
Basic Revocable Trust
In its most simple form, a revocable living trust is a separate entity that the Grantor will fund with both assets and capital for their own benefit, as well as their family’s if they have one. When the grantor dies, the trust terminates, and the assets placed into that trust will transfer to the named beneficiaries, whether they’re a surviving spouse, the grantor’s children, or a different party altogether. This allows your loved ones to avoid going to probate court in order to get what is rightfully theirs, sparing them time, money, and further stress.
Revocable Trusts for Children
Revocable living trusts can also be incredibly advantageous for any parents out there. Under this arrangement, the assets placed in the trust will first transfer to the surviving spouse after the death of the other partner. Then, when the surviving spouse passes, the original trust will dissolve into one or more continuing trusts for the benefit of the Grantor’s children or grandchildren. The beneficiaries can either draw from a single, combined trust, or multiple trusts can be created for greater privacy and control.
Joint Revocable Trust
Married couples also have the option of forming a Joint Revocable Living Trust instead of having one for each partner. Similar to a joint bank account, this kind of revocable trust combines both spouse’s assets into a single trust for simplified management. This set up is ideal for couples who have lived in community property states during the tenure of their marriage.
Couples with more complicated estates subject to high tax rates might benefit more by establishing separate trusts. Keeping separate trust accounts might also be a preferable strategy for couples interested in preserving their individual property rights.
Revocable Trust with Estate Tax Planning
A Revocable Living Trust can also be structured in order to minimize estate taxes for married couples. Although Florida has no estate tax of its own, you’ll still have estate taxes at the federal level to deal with. This can be accomplished by adding a credit shelter for the surviving spouse that won’t be included in the survivor’s taxable estate. Surviving spouses have a lot of flexibility when it comes to managing the trust, which can make an already stressful time significantly easier.
Trusts for Pets
Pets are often tragically overlooked during the estate planning process. Chances are that if you have any, you consider them a part of your family, too. Thankfully, Florida law offers pet owners several options that they can use to make sure that their furry friends are taken care of after their passing. A revocable trust is one method, but you can read about your other options by checking out our Insight on the matter here.
Because Revocable Living Trusts are more complex than a traditional will, it’s important that you hire a professional to create yours instead of trying to use less reliable “DIY” estate planning websites. For assistance with setting up your Revocable Living Trust or other Estate Planning needs, call us at (727) 279-5037 or schedule an appointment online.