Our goal as estate planners is to ensure that your designated beneficiaries receive your assets upon you’re your death with as little diminution as possible. While the size of estates may vary, the assets you own at death represent all that you have worked so hard to acquire, protect, and grow during your lifetime. Wills can be a useful tool for accomplishing that goal, however living trusts may have important advantages when it comes to the distribution of your property at death.
Your last will and testament is a legal document containing directions about how your estate should be managed and distributed when you pass away. Your will names an executor, referred to as a Personal Representative in Florida, who has the job of carrying out your testamentary instructions upon your death. The estate administration will begin when your will is submitted to the court for probate. Probate is a process by which the terms of your will are carried out under the supervision of the probate court. Such a supervised process may extend the time necessary to administer your assets and may increase the costs of administration.
One main advantage of a creating a revocable living trust is that property titled in the name of the trust upon death is not required to go through the supervised probate process. While a trust administration is still necessary and the guidance of an attorney should be obtained, the process can be tailored more specifically to the assets actually owned. Generally speaking, assets held in a revocable living trust upon death can be effectively transferred to your intended beneficiaries without court involvement.
A “living trust” is so named because it is created during life. You may name yourself trustee of the trust during your lifetime while designating a successor trustee who takes over upon your death or incapacity. The successor trustee can manage the assets during any period of incapacity and then administer the trust and distribute your assets to the beneficiaries you named in your trust after death.
The reason so many people seek to avoid probate is that it can subject your estate to higher legal fees and costs, as well as to unnecessary court scrutiny. In addition, the court files may in large part be accessible on public records. In some cases, probate may also expose the estate to challenges by heirs, creditors and other interested parties that may have no knowledge and no entitlement to participate in a trust administration. By contrast, a trust can be administered privately, without required court supervision.
As you can see, living trusts have some major advantages over wills, however, when you create a revocable living trust, you will still need a pour over will and other ancillary documents: Durable Power of Attorney, Designation of Health Care Surrogate and Living Will, to protect you in the event of incapacity or death. Once your basic estate planning documents are created, your attorney must take a careful look at how your assets are titled to ensure effective estate planning.
Bankier, Arlen & Snelling Law Group, PLLC in Delray Beach helps clients in Broward County and Palm Beach County with all areas of estate planning. To arrange a consultation, please call M. Adam Bankier at 561-278-3110, Robert M. Arlen at 561-279-1880 or Linda L. Snelling at 561-501-7778 or contact us online.