BETTEN, MURPHY & WEISS
Attorneys, PA
Brevard's Elder Law Firm
1800 Penn Street, Suite 6
Melbourne, FL 32901-2625
Phone (321) 676-2525
A trust, also known as a Revocable Living Trust is a legal document that holds title or ownership to your assets. When you create a Revocable Living Trust you transfer ownership of your assets to the trust. Transferring assets is called "funding." When you transfer title you DO NOT relinquish any control. You can still buy, sell, borrow or transfer. To many the living trust looks a lot like a will. It includes the details and instructions for how you want your estate to be handled at your death. However, unlike a will a properly funded trust: 1) Does not go through probate; 2) Prevents the courts from controlling your assets at incapacity; and 3) Gives you control over the assets you leave to your minor children or grandchildren.
- What is a Revocable Living Trust?
- What are the advantages of a Revocable Living Trust?
- Why doesn't everyone have a Trust?
- Do all Trusts avoid Probate?
- Is a special tax return required of my Trust?
- Why is it important to transfer assets into (fund) the Trust?
- What is the difference between a Trust and Will?
- If I set up a Trust is a Will also needed?
- What is a Trustee?
- How do I select my Trustee/Successor Trustee?
- What is a Settlor?
What is a REVOCABLE LIVING TRUST?
A revocable living trust is an estate planning device that allows you to substantially avoid probate by placing your property in the trust while allowing you to control that property during your lifetime and designate where that property shall go on your demise.
You can do anything with your assets in a Trust as you can right now. You can buy or sell stocks, real estate or other assets or make gifts. You can even amend and/or cancel the Trust at your option.
Revocable means you can change or cancel the terms or assets of the Trust. Irrevocable means you can not take the assets out of the Trust or change the terms.
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What are the advantages of a REVOCABLE LIVING TRUST?
Trust assets pass directly to beneficiaries as soon as all creditors are satisfied. Trusts avoid the expanse and delay of probate.
In the event of incapacity, the successor Trustee may take over insuring doctor bills and other bills are paid and provide financial assistance as you direct from the Trust. The Trust assets will never be subject to a Guardianship proceeding. The successor Trustee might be empowered to undertake Medicaid planning if a Nursing Home is in the Settlor's future.
The Trust(s) can be designed to minimize or even eliminate the Federal Estate and Gift Tax.
A Trust can be designed to provide continuity of investments for your spouse and spare the spouse of the overwhelming task of Financial management while providing for their needs.
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Why doesn't everyone have a Trust?
People do not know about Trusts, do not plan for the future and ignor death.
Some attorneys are not Elder Law Attorneys and are not familiar with the needs of mature clients and their families. Some are not familiar with the advantages of Trusts. Remember, an Attorney who recommends a Trust may be doing themselves out of a probate fee.
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Do all trusts avoid Probate?
No. When your Will contains a provision for a Testamentary Trust, probate will not be avoided. Testamentary means to be created after your death. This means your assets will go through probate in order to be funded into the Testamentary Trust.
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Is a special tax return required to be filed by my Trust?
Be careful! No special tax return is required as long as the settlor(s) receive all the income from the Trust.
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Why is it important to transfer assets into (fund) the Trust?
The reason is to avoid probate. Assets in a Trust avoid probate. Trusts avoid probate, saving probate fees, maintain privacy (an inventory of all assets are filed in probate) and no probate delay (probate takes at least six months).
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What is the difference between a TRUST and WILL?
A Will distributes your assets at the time of your death through probate. A Trust will distribute your assets without the expense and delay of probate as soon as all creditors are satisfied. Setting up a Trust initially is more expensive than setting up a Will, but may avoid most probate costs and delay.
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If I set up a Trust is a Will also needed?
Yes, a "Pour-Over Will" is drafted at the same time as a Trust. It acts as a safety net. Assets not in the Trust are caught by the Will and through probate are transfered (poured over) into the Trust.
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What is a Trustee?
A Trustee is the person or institution who is responsible for holding, managing and distributing money or other property in a Trust for the use and benefit of the beneficiaries. Normally, the Trustee is initially you, at least during your life. When you can no longer serve, then the sucessor Trustee takes over. The successor Trustee could be a family member, friend, bank or trust company.
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How do I select my Trustee/Successor Trustee?
Selection of your Trustee/Successor Trustee is the most important part of Trust planning. The Successor Trustee should be selected with great care. The Successor Trustee will have control of the Trust assets upon your incapacity or demise. Selection should only be done after discussion with your Elder Law Attorney who is in a position to offer suggestions as to who would be suitable for your personal and financial requirements.
Most people choose to be their own Trustee, or Co-Trustees with their spouse, retaining control and decisionmaking authority over their assets. Very often in this case, the Successor Trustee will be an adult child retaining control of the Trust within the family and avoiding the expense of a institution.
The criteria for selecting someone besides yourself include, but is not limited to: experience, financial ability, reputation, cost and willingness to serve.
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What is a Settlor?
A Settlor is the person creating the Trust. Also known as Grantor or Trustor.
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