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Clearwater & Oldsmar Elder Law Attorney
  • The Florida Bar
  • NELF - National Elder Law foundation
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How Trusts Can Protect You and Your Family

Planning

Accumulating and preserving assets to pass on to the next generation is a goal of many parents.  A number of alternative legal and financial arrangements can be employed to minimize or eliminate unnecessary costs, and maintain flexibility in the investment and management of the assets.  One option that is often used is a Trust. A Trust is established by signing a legal document.  Ownership of assets are then transferred by the individual who created the Trust (the grantor) to the individual designated to manage the assets (the Trustee) for benefit of a named beneficiary. The Trustee manages the Trust assets in a fiduciary capacity, meaning all of the Trustee’s actions and decisions must be in the best interest of the beneficiaries. Trusts are often used to supplement or completely replace a Will because, if structured properly, they can often avoid the need for a probate proceeding to distribute property after death. Many different types of Trusts exist for various purposes, such as to benefit a charity or care for an animal after death, but one of the most common and well-known is the “living” or Revocable Trust. The purpose, creation and benefits offered by a Revocable Trust will be explored below.

Purpose/Benefits of a Revocable Trust

With some Trusts, once property is transferred from the grantor into the Trust, the grantor loses complete ownership, control and access to the assets in favor of the named beneficiaries. A Revocable Trust, however, allows a grantor to maintain control over Trust assets during his/her life, and even serve as Trustee if so desired. Further, the grantor usually retains the right to withdraw money or assets at any time and for any amount under the terms of the Trust Agreement. The grantor also has the ability to freely modify and/or terminate the Trust during his/her lifetime, assuming the grantor is mentally competent. However, in order for the Trust to work properly and provide the maximum amount of available legal protection available, a grantor needs to take the following steps:

  • First, actually transfer money and other assets into the name of the Trust before the grantor dies. This is called funding the Trust, and is necessary to keep property out of probate. If the Trust has no assets when the grantor dies, the legal document has no legal effect, and all of the grantor’s property must go through the traditional probate process.
  • Second, if the grantor also wants to serve as Trustee, name another person to take over this role if the grantor becomes incapacitated or dies. Having another party designated as Trustee to manage the Trust and for the benefit of the grantor, if the grantor becomes incapacitated could avoid the need and expense of obtaining a guardian to perform this function.

The Basic Requirements to Create a Valid Revocable Trust

Creating a Revocable Trust begins with executing a Trust Agreement. Florida law says that in order for a Trust Agreement to be valid and enforceable, all of the following must be true:

  • the grantor must be competent, e., able to make sound and reasonable decisions;
  • the grantor intended to create a Trust;
  • the Trust has a definite beneficiary, e., names a definable person or entity; and
  • the Trustee has defined duties.

Contact a Florida Trust and Estate Attorney

Setting up the right estate plan is crucial to meeting your short and long-term financial goals. Working with an experienced estate planning attorney can minimize expenses, arrange for your care in the event of incapacity and insure that your intended wishes are carried out.  Attorney William Rambaum, Board Certified as a specialist in Elder Law, represents clients in the Clearwater area. Contact him today to set up an appointment.

Resources:

floridabar.org/public/consumer/pamphlet028/

leg.state.fl.us/Statutes/index.cfm?App_mode=Display_Statute&Search_String=&URL=0700-0799/0736/Sections/0736.0402.html

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