Does A Trust Have To Be Registered In Florida?
Florida Revocable Living Trust - Comprehensive Guide
The term revocable living trust and living trust are one and the aforementioned. The terms are used interchangeably, simply when I refer to a revocable trust or a living trust, I am referring to the revocable living trust.
What is a Revocable Living Trust?
A Florida revocable living trust is a legal fiction. While y'all are live, you lot and the living trust are one and the same.
For the assets titled nether your living trust, you volition file your income taxes on your aforementioned tax return as yous would do with any other asset that is giving you income.
The issue of putting an nugget into the living trust is that information technology changes the title to the asset for legal purposes. Instead of the asset existence in your individual name, now it will be under the name of your living trust.
For case, if your asset is titled under John Doe, afterward you transfer the nugget to your revocable living trust, it volition be titled as John Doe, equally Trustee of the John Doe Revocable Living Trust dated _______ [execution date].
A Florida revocable living trust must take a trustee at all times. The trustee is the person in charge of administering the trust. During your lifetime, you will usually exist your own trustee unless yous designate someone else. Upon your incapacity or death, then yous must designate a successor trustee to administrate the trust on your behalf.
The trustee in Florida has a fiduciary duty to you. To administer the trust according to the provisions of the trust and to follow your intent and your wishes as much as reasonably possible. If the trustee fails to abide by these requirements, he may be liable to you or the beneficiaries for breaching his or her fiduciary duties.
What is the purpose of a Florida Revocable Living Trust?
There are 5 primary purposes of a Florida revocable living trust: 1) avoid probate court; 2) avoid guardianship court; three) give you lot control after expiry; 4) avert guardianship court for minor children 5) nugget protection for your beneficiaries; and six) protection for individuals with special needs.
Florida Revocable Living Trust Helps you Avert Florida Probate Court
The first purpose of a Florida revocable living trust is to avoid probate court.
Assets that are titled individually nether your name, which do not accept a beneficiary designation or a survivor provision, pass through Florida probate courtroom.
The key term is individually nether your name. When the asset is transferred from your name individually, to the name of the living trust, for legal purposes the trust is a carve up legal person.
This helps you avoid probate court because when you lot pass away, the asset will no longer exist nether proper noun, just in the name of the revocable trust.
Florida Revocable Living Trust helps you Avoid Florida guardianship court
The second purpose of a Florida revocable living trust is to avoid Florida guardianship court.
If you become incapacitated to the point where you cannot longer make your ain decisions or you need assistance for your daily needs, and so a guardian may need to be appointed on your behalf.
There are two unlike type of guardians: i) guardians of the person and 2) guardians of the property. The guardian of the person has the dominance to brand wellness intendance decisions on your behalf, while the guardian of the property has the authorization to manage your finances.
The fashion a Florida revocable living trust helps you avoid guardianship is that if essentially all of your assets are titled nether your Florida living trust, then no guardianship of the holding will exist needed because the "successor trustee" you designate in your revocable living trust will be in charge of administering the assets of the living trust according to the provisions in the trust.
The Florida revocable living trust gives y'all command of your assets at death
The third purpose of a Florida revocable living trust is to give you control after death. Up until your decease, you can make any changes to revocable living trust. Still, upon your passing, the Florida revocable living trust becomes irrevocable and no other changes can be made unless with court approving.
The effect backside this is that upon your death, yous can dictate how the assets volition be distributed to your beneficiaries. You tin can select for your success trustee to immediately distribute your avails at expiry, after paying any creditors and expenses of your estate.
The other option is for your success trustee to make distributions periodically. We estate planning attorneys utilise this option a lot. Nosotros typically will recommend for the success trustee to make income distributions and authorize the successor trustee to make primary distributions for specified events like health, didactics, maintenance and support.
You lot tin can designate your trustee to hold the assets in trust until your children turn 35 for instance, while periodically providing the income of the trust to your children, and giving the discretion to the trustee of making principal distributions at specified ages or at specified events in their lives.
The Florida Revocable Living Trust allows you to avert guardianship court for the inheritance your children will receive
In Florida, if a child receives more than $15,000 in an inheritance, a guardian of the property will need to exist appointed even if the child's biological parent is still alive. To learn more check out this page.
When you lot leave your children a major inheritance, the surviving parent or another individual volition need to open up up a guardianship in order to receive the inheritance.
The purpose of the guardianship is to appoint a guardian of the property for the child and so that the guardian will administer the funds for the all-time involvement of the kid.
Up until the child turns 18 years old, the guardian volition need to file annual bookkeeping and request permission from the court for specified expenses of the inheritance funds. This tin exist a major hassle.
In addition to the accounting requirement, you lot will demand to hire a guardianship attorney to aid you with the process and as well maintain that attorney throughout the guardianship process. In Florida all guardians must exist represented by an chaser. Guardianship are usually expensive, unremarkably ranging from $three,000 to $5,000.
The Florida Revocable Living Trust provides asset protection for your beneficiaries at expiry
Opposite to popular believe, the Florida revocable living trust does not provide any asset protection while you are alive. Equally mentioned earlier, yous and the living trust are one and the same during your lifetime.
Upon your passing, the Florida revocable living trust becomes irrevocable and at that point, if properly drafted, nugget protection provisions can be added to the living trust to protect your beneficiaries.
The living trust should be drafted in a way that gives the successor trust discretion to make distributions. If the trustee is required to make distributions then that living trust volition have less protection.
The reason for this is that the creditor of your casher cannot force the trustee to make distributions. The creditor can only attack the distribution once it is made to your beneficiaries.
Another provision that can be added is an "spendthrift provision." The spendthrift provisions makes it and so that your beneficiaries cannot assign their involvement in the trust to everyone else, thus providing protection against creditors. Although the spendthrift provisions has some exceptions, information technology is however an useful tool to provide creditor protection to the beneficiary.
The Florida revocable living trust protects individuals with special needs or a Medicaid Recipient
If you take a child with special needs or if yous intent to provide with your inheritance for someone that is receiving Medicaid or governmental benefits, then you must fix a Florida revocable living trust with a special needs trust built into it.
If a child with special needs or a disabled person receiving governmental benefits similar Medicaid receives an inheritance, then that inheritance will be counted against them for the purpose of qualifying for the governmental programs.
The purpose of the special needs trust is supplement the governmental benefits and not eliminating the need for it. A lot of the time, there is no inheritance that will exist large plenty to embrace for the expenses of health intendance that the person will need.
What Type of Assets Should You Transfer into the Florida Revocable Living Trust?
Like I mentioned higher up, only avails that are titled under your own individual name, which do non have a beneficiary designation or a survivorship provision pass through Florida probate courtroom.
If your main goal is to avoid probate courtroom, and so long every bit you lot have assets that will not laissez passer through probate then you volition not need a trust. Yet, if you take assets that will laissez passer through probate, the a Florida revocable living trust will be a good idea.
When thinking of whether to create a Florida revocable living trust, we take to think about the purpose of creating a revocable living trust.
For example, a bank account which has a proper beneficiary designation volition not pass through Florida probate. However, upon your decease, the casher will receive all the funds in that business relationship. This might not exist the best thing, specially if the beneficiary is a minor or someone that does not know how to manage their finances.
But nigh assets can be placed in the name of a Florida revocable living trust. The 2 assets that you must beware before you place them in a revocable trust are your Florida Homestead and Individual Retirement Accounts ("IRA's).
Homestead has many restrictions, which I encompass in this Article. But to requite you a brief overview, if yous transfer your Homestead to your revocable living trust and pass way prior to your child's turning 18 years old, and so that will exist an invalid devise of the Homestead and information technology will laissez passer according to the Florida Homestead Statute and not according to the provisions of your revocable living trust.
In improver, if you take a spouse, you need your consent of your spouse before transferring the Homestead into your trust, and she will also need to sign a spousal waiver.
Ordinarily, is best to exit your Homestead every bit it is unless yous accept not married and have no minor children. There are other options that can besides be looked into like a "Lady Bird Deed."
IRA'south ordinarily are also left untouched. They are a creature of federal police force and in order to be placed into a trust strict requirements must be followed. IRA'southward are outside of the scope of this commodity, merely I volition set another commodity telling you more about this topic. Make sure to subscribe to my Newsletter to find out more.
Requirements of a Florida Revocable Living Trust
The Florida revocable living trust requirements is governed by Department 736.0402 of the Florida Trust Code. In social club to create a valid revocable trust in Florida, the following elements have to be nowadays:
- Y'all must have capacity to create the trust;
- You must signal an intent to create a trust;
- The trust must have definite beneficiary;
- The trustee must have duties to perform; and
- The same person is not the sole trustee and sole beneficiary.
The chemical element that nigh estate planning attorneys concentrate on is the beginning element, the capacity to create the trust. The chapters to create a revocable trust is the same chapters required to create a last volition and testament in Florida.
In Florida, any person 18 years or older with a sound mind may create a last will and testament. The capacity to create a last will and testament or a revocable living trust must be there at the time that the document is executed.
A person is of audio listen if the person generally understands the nature and extent of the property to be tending of, the relation betwixt the person and those who would naturally merits a do good from the last will and testament, and the nature and effect of the testamentary act. In re Wilmott'due south Estate, 66 So. 2d 465, 467 (Fla. 1953).
To put it in simpler terms, you lot must have full general knowledge of the assets yous own and their values, y'all must understand who stands to inherit under your final will and testament, and understand the purpose of the testamentary human activity.
The primal element is a general understanding. You lot do not accept to know each person that is entitled to inherit or the values and list all of your specific avails, but you do non need to take a full general knowledge of what you lot have and who is going to. Obviously, the better your understanding, the less likelihood it volition be challenged later on in courtroom.
If yous need help setting up your Florida Revocable Living Trust Contact my part.
If y'all are ready to ready your Florida revocable living trust or have any farther questions or concerns contact my office at (305) 489-1415. Yous tin can also complete the contact form included in this page to reach me directly. Rest bodacious that your advice will exist kept confidential.
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