A Florida living trust allows you to transfer assets into a trust during your lifetime while you continue to use them, and then have them distributed to your choice of beneficiaries after your death. Living trusts have many benefits and are an appealing estate planning option.
Living trusts in Florida
When you create a living trust in Florida you are the grantor of the trust, the one who decides its terms and places assets in it. You select a trustee who manages the assets. It is common to choose yourself as trustee, but you can pick anyone you want. If you select yourself you need a successor trustee to handle the trust after your death. The trust directs the trustee to manage the assets for your benefit in your lifetime, then distribute them to the people you name as beneficiaries after you die. You continue to use the assets in the trust while you are alive as if you still owned them.
In Florida, it is not always possible to add your home to your trust, or you may need special language in the trust agreement to make this possible due to restrictions in the law. IRAs, 401(k)s, and Keough plans are never eligible for placement in a revocable living trust.
One of the benefits of a living trust is that assets placed in the trust do not go through probate. The trust directs what happens to those assets and you do not need a will or a probate proceeding in court for the assets to pass to your beneficiaries. Because probate proceedings take months and incur additional cost, creating a living trust in Florida allows you to bypass this. There is one catch however. A revocable living trust in Florida is liable for the debts of the grantor who dies and there is a two year period for claims to be filed. This means a trust cannot be fully paid out while those claims are pending. However, if probate is also filed for, this restriction is lifted and there is only a three month wait. Because of this, it often makes sense to file for probate anyhow, thus removing any time or cost savings that might have been avoided by just using a trust.
In addition, Florida has a simplified probate proceeding for estates totaling less than $75,000, making a trust an unnecessary expense for simplifying probate for small estates. Most people who own a home do not qualify for this, however.
Do I need a living trust in Florida?
A living trust in Florida provides excellent control of your assets. During your lifetime, you manage and use the assets as you normally would. After your death, the assets are distributed to beneficiaries according to the specifications in the trust and as grantor you can set up exactly how and when assets are distributed, unlike a will that distributes everything immediately upon probate. A trust can state specific dates or conditions for distribution. It is important to note that assets placed in a Florida revocable trust are not protected from a spouse’s elective share (the right of a surviving spouse to claim a certain percentage of an estate even if not provided for in the will).
Living trusts provide management of your assets even if you are mentally incapacitated and make your assets, trust terms, and beneficiaries private, unlike will provisions, which become public record.
A revocable living trust can be changed by you at any time in your life and becomes unchangeable after your death. An irrevocable living trust can never be altered. If you die without a will or trust, your assets pass via state intestacy laws, which decide what percentage your relatives receive.
Living trusts and estate taxes in Florida
Your trust does not avoid estate tax, however, there is a $5 million federal exemption. Only estates over this amount pay tax. An AB, QTIP, or marital trust is a type particularly written to pass assets from one spouse to another, avoiding any estate tax that would be applied.
How to create a living trust in Florida
Your trust agreement becomes effective after you sign it in front of a notary and fund the trust by placing assets into it. A living trust can be an excellent estate planning tool that offers many benefits and protections.
Ready to create a living trust in Flordia? LegalZoom can help you create a Florida living trust online quickly and easily. Fill out a simple questionnaire to get started. LegalZoom will review your answer and prepare your living trust package, and mail the package to you.
Find out more about Living Trusts