Florida residents who would like to simplify the way their estates are administered after they pass away often choose to create revocable trusts instead of drafting wills. Revocable trusts are documents that allow individuals to manage their assets while they are alive and determine how they will be distributed after they die. They are called revocable because they can be modified or terminated.
Creating a revocable trust
The person who creates a revocable trust for asset management purposes is called the grantor, and the parties they choose to manage them are called trustees. Trustees are usually family members or trusted acquaintances, but they can also be corporations like trust companies or banks. Under Florida law, the person who creates a revocable trust can also be a trustee. The benefits of doing this include avoiding a new assessment and possible fees and taxes when real estate is transferred to a revocable trust. However, grantors who name themselves as trustees should always have at least one additional trustee to ensure that their assets will continue to be managed if they become incapacitated.
One of the chief benefits of revocable trusts is that they ensure the grantor’s assets remain available to them if they become physically or mentally incapacitated. When individuals who do not have a revocable trust or durable power of attorney in place become incapacitated, court proceedings are necessary to appoint a guardian to handle their legal and financial affairs. These proceedings take place in public, which means they can be embarrassing as well as costly.
Creating a revocable trust can provide peace of mind and allows the grantor’s estate to avoid probate. This is the legal process that determines whether the will left by a decedent is valid and supervises the transfer of their assets. Jointly owned assets are not subject to probate. In Florida, estates that have non-exempt assets worth less than $75,000 go through a simplified procedure called summary administration. An experienced estate planning attorney could explain the benefits of revocable trusts as well as other estate planning tools like durable powers of attorney and health care directives.