Revocable Trusts

A “living trust,” also known as a “revocable trust,” supplements a Last Will and Testament and when successfully funded, can allow a complete or partial avoidance of the time and expense involved in probate proceedings after death. During the trust maker’s (known as the Settlor or Grantor) lifetime, the trust is revocable, meaning property can be transferred into and out of the trust by the owner, and amendable, so that the terms of the trust relating to distributions, naming of trustees and other provisions can be altered. However, at the time of the Settlor(s)’s death, the trust becomes irrevocable. The two primary objectives of revocable trusts are to avoid probate, and to provide an alternative to guardianship should the Settlor become incapacitated. Many trusts are “joint” trusts, with husband and wife using a single trust; in other instances, husband and wife will have separarate trust documents.

Trusts do not always serve to reduce federal estate taxes, as most tax planning can be accomplished within a Last Will and Testament. Florida has no separate state imposed estate tax; any estate which has a gross value of more than $2,000,000 at the time of the individual’s death is required to file a tax return and to determine if tax is owed. For married couples, planning can often be done to defer any tax owed until the death of the surviving spouse.

There is no magic number (value of your assets) which determines whether a revocable trust makes sense to you. Instead, it is the nature of your assets and the composition of your family which will often dictate the most appropriate documents for your personalizedlan. In order to develop an appropriate estate plan and to avoid unnecessary taxes upon death, please contact our office for assistance.