In Florida, a living trust (also known as an inter vivos trust) is one probably your best option if you want your estate to avoid probate after you die. Why does that matter? As our South Florida living trust attorneys can explain, it means more of your assets – the things you worked hard for during your life, the things you want to see preserved and passed on – will not only go straight to the individuals you want to see in receipt, less will go to court fees and the state of Florida.
In general, a trust is an agreement entered into by the person who creates the trust (settlor or grantor or trustmaker) and the beneficiaries of that trust (i.e., those who benefit from it). That contract will determine what happens to the assets contained in the estate when you die. A living trust allows for one not only to make plans for an estate to avoid probate (and save a great deal on legal expenses), as well as allow you to map out a plan for disability, preserve Medicaid benefits and lower estate taxes.
The most common type is called a revocable living trust, and it’s created during one’s lifetime (rather than upon the trustmaker’s death), and can be revoked by the trustmaker at any point, rather than one that is established and cannot be undone. Revocable living trusts are often the preferred way to transfer assets in states like Florida where we know probate is both time-consuming and incredibly costly.
For example, let’s say you have a home in South Florida that you would like to ensure is transferred to your children after you die, a revocable trust is a good option. However, you may want to ensure the home technically stays in your name so that you get the homestead tax exemption break that Florida affords. It’s imperative, however, to comply with state constitutional provisions pertaining to descent and devise. That means spouses and minor children who survive the decedent need to be prioritized according to state law. If it does not, it may be deemed invalid by the courts, and end up in probate or trust litigation anyway. That’s why it’s so important when developing a revocable trust for Florida homesteaded property to discuss these matters with a Fort Lauderdale probate attorney experienced in living trusts.
There is also typically a “due on transfer” clause anytime property is transferred upon one’s death. This pertains specifically to property with a remaining unpaid mortgage balance on it. This balance has to be paid when the property is transferred because they can’t be sold or transferred until it’s fully paid for. However, in cases where a transfer is made to a revocable trust (instead of to a third party), payment in full isn’t required. However, the lender needs to be notified in these cases and the trust needs to be correctly named to avoid any issues that may arise with subsequent gifts, sales or transfers. Further, if there are any errors on your Florida homestead documents, these need to be corrected promptly.
Talking with an experienced probate lawyer while developing your trust – or after the death of a loved one – is imperative to ensure as few snags as possible.
Call Fort Lauderdale Probate Attorney Richard Ansara at (954) 761-4011. Serving Broward, Miami-Dade and Palm Beach counties.
Additional Resources:
Dad wants me to have his house. Will a living trust help? Sept. 4, 2018, NJ.com
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