24/04/2024

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The Revocable Living Trust and How it Helps to Avoid Probate

The Revocable Living Trust and How it Helps to Avoid Probate

A Revocable Living Trust is a document that allows you to transfer assets from your individual self to yourself as a Trustee, thus removing the assets from your individual estate and avoiding probate and limiting the estate tax burden for your family after you are gone. This transfer is permitted in Florida, but not in all states. The Trustee retains title to the Trust assets and controls them as if they owned them. Therefore, you are able to manage your assets in the same manner as before the Trust was created and funded. Upon your death or incapacity, the Successor Trustee you have selected takes over and administers your Trust according to its terms.

A Revocable Living Trust is amendable and/or cancellable at any time during your life. You may buy or sell securities in a Revocable Trust as your do now and you may make gifts from that Trust if you choose. The Trust can also help you in the event that you become disabled. You may appoint a Successor Trustee who is directed to administer your Trust and take care of your needs in the event that you become disabled or incapacitated. The Successor Trustee could pay all of your household and medical bills from the Trust so that you don’t have to worry about them when you recover.

There are many advantages to having a Revocable Living Trust. It assures protection for emergencies, disability or incompetence. It avoids probate and reduces estate tax settlement expenses and delays. It provides continuity in the investment management of your assets. It eliminates the problems of guardianship. It remains private and thus minimizes the publicity of your estate. It can coordinate all your assets in an efficient, unified and flexible plan. It can be revoked or amended at any time. It can limit or eliminate the estate tax burden on the surviving beneficiaries.

Generally, anyone with assets over $100,000 should consider implementing a Revocable Living Trust as the cornerstone of their estate plan. That $100,000 number includes the benefit of any life insurance policies you own at the time you die, your home, your bank accounts, your car, jewelry, etc. You’d be surprised at the dollar value the Federal government puts on your property in order to determine how much estate tax will be levied on your estate. That $100,000 is a very low target. You should speak with your South Florida estate planning attorney immediately about setting up a Revocable Living Trust.