A Palm City revocable living trust lawyer could use their experience to help you plan for the future. While contemplating the future may seem daunting, there are numerous ways to protect your assets, and a trust is certainly one of them. However, to ensure that you can successfully create a trust, it is best to instead let a lawyer do that for you. Reach out to an attorney with experience handling trusts today. Defining a Revocable Living Trust A revocable living trust (RLT) is a trust agreement created by a settlor during life that is amendable and revocable at any time by the settlor so long as the settlor has capacity. Additionally, there are no major disadvantages to RLTs, but they do require a little more cost to set up due to the added complexity as compared to a plan that is centered around a will. Revocable living trusts are used primarily as an efficient method of transferring wealth and assets to beneficiaries, including spouses, children, grandchildren, and others. They are sometimes referred to as “will substitutes” but possess many advantages that wills do no. In fact, there is an infinite number of provisions that may be included in a revocable living trust, but some of the most common include successor trustee provisions, incapacity provisions, provisions regarding trustee powers, and distribution provisions. Importantly, creating an RLT does not mean a grantor has forfeited his or her rights to amend the trust. The grantor of a revocable living trust has the right to revoke or amend the trust at any time. The grantor also may freely transfer assets into and out of the trust. With regards to taxes, there are numerous benefits to trusts, especially since they are “tax neutral”. Tax neutral simply means that the use of a living trust does not create any additional tax consequences while the trust is revocable during the life of the settlor. In fact, revocable living trusts typically report income under the settlor’s own social security number. Lastly, revocable living trusts become irrevocable upon the death of the settlor. They may become irrevocable for all practical purposes, even if only on a temporary basis if the settlor becomes incapacitated. Benefits to a Revocable Living Trust Advantages of RLT’s in Martin County include the following: Smooth and tax: efficient transfer of wealth without the requirement of probate administration Superior incapacity planning as compared to reliance upon a power of attorney document Privacy: RLT’s remain private in nature as opposed to wills, which become public following death Asset protection for beneficiaries: RLT’s can be customized in order to provide some very substantial asset protection for trust beneficiaries For more information about RLTs, potential grantors should speak with a Martin County revocable living trust lawyer who can help. A Pour-Over Will Explained A pour-over will is simply a will that contains a clause directing that, substantially, all assets owned at death are to be distributed to the testator’s revocable living trust. A pour-over will, when properly executed, has the same legal effect as a last will & testament. Requirements for Creating a Trust In order to create a valid trust in Florida, F.S. §736.0402 requires that the settlor has capacity, the settlor indicates an intent to create a trust, and the trust has a definite beneficiary or is a charitable trust, a trust for the care of an animal, or a noncharitable trust without ascertainable beneficiary as allowed by F.S. §736.0409. Also, the trustee must have duties to perform, and the same person may not be the sole trustee and sole beneficiary. Common Misunderstandings Surrounding Trusts One of the most common misconceptions about trusts is that the creation of a trust will result in a loss of control of assets. This is simply not true. In many cases, the settlor of a revocable living trust also serves as the initial trustee. As the trustee, the settlor has control over all trust assets and may manage and direct the investment of those assets. Another common misconception about revocable living trusts, in particular, is that these trusts provide asset protection. While revocable living trusts may be drafted to provide substantial asset protection to trust beneficiaries, they do not protect the assets of the settlor. In fact, FL Statutes §736.0505 makes clear that assets held in a revocable living trust during the settlor’s life are treated, from an asset protection standpoint, as though they are owned by the settlor individually. Speak with an Experienced Martin County Trust Lawyer If you are thinking about protecting your assets for the future, you need to consider working with a Martin County attorney who has experience working with people who wish to do the same. Written by: John Mangan, JD, MBA
