It is not unusual to see people talking about how Florida living trusts are useful estate planning tools. Still, not everyone knows what a trust is and why one should create a living trust to protect their estate and loved ones.
Keep reading to find out the benefits of a Florida living trust.
Florida Living Trust – Understanding the Concept
A trust is a fiduciary relationship between a trust maker, a trustee, and the individuals designated as the trust maker’s beneficiaries. First, the trust maker (referred to as trustor or settlor) transfers the nominal ownership of certain assets to the name of the trust.
Then, the trustee holds the property held in trust for the benefit of the beneficiaries. In living trusts, the term “living” refers to the fact that the effectiveness of the trust starts while the grantor is still alive.
Considering living trusts are revocable trusts, the trustor has the authority to alter, amend, or even revoke the trust instrument at any given time. Upon the trustor’s death, a living trust becomes irrevocable, meaning the trust instrument may not be altered or terminated.
What Are the Benefits of a Florida Living Trust? – The Essentials
One of the essential characteristics of a living trust is the ease to administer and the flexibility granted to trustors.
For example, a revocable living trust permits the trustor to designate him or herself as the trustee, naming a successor trustee in the event of death or incapacitation. Hence, during the trustor’s lifetime, he or she maintains control over the assets held in the trust.
When someone dies owning assets solely in his or her name in Florida, the decedent’s estate will likely go through probate. Instead, the assets titled in the name of a living trust are not subject to probate upon the trustor’s death.
Protecting the Interest of First-Marriage Children
Unlike previous generations, the number of blended families is increasingly surpassing the number of traditional families in Florida.
One of the consequences of this new reality is an exponential rise of legal disputes involving surviving spouses and children from the decedent’s first marriage.
If the decedent dies without a will, things can get even harder, as his or her estate will be administered under Florida intestacy laws. These statutory rules provide a preset order of preference for the distribution of the decedent’s assets.
Generally, the surviving spouse tends to be the favored party under this type of administration.
The best approach is to set up a living trust designating children from a first marriage or any previous relationship as beneficiaries, ensuring a smooth inheritance process. Plus, a trust instrument may prevent a surviving spouse from disinheriting first-marriage children.
Protecting Stepchildren’s Rights
Under Florida law, unless there is specific language in a will designating stepchildren as heirs, they are not entitled to a share of their stepparents’ estate upon death. Stepchildren involved in intestate cases have even less protection.
Therefore, a stepparent may create a living trust to designate one or multiple stepchildren as beneficiaries, protecting their interests and guaranteeing they will receive their fair share of the estate upon his or her passing.