A living trust is a legal document that outlines how you want your assets to be managed during your lifetime and after your death.
As the grantor, you can revoke or change the terms of the trust at any time as long as you are alive and mentally competent. Upon your death, the trustee(s) named in the trust document will take over and distribute your assets according to your wishes.
Benefits of a Living Trust
Creating a living trust can be beneficial for many reasons. First, it can help your loved ones avoid probate court proceedings after your death, which can be both costly and time-consuming.
Second, if you become incapacitated, the trustee(s) can step in and manage your affairs without having to go through a lengthy and expensive legal process.
Finally, a living trust can provide privacy for you and your family because probate records are public record.
Types of Living Trusts in Florida
There are two main types of living trusts in Florida: revocable trusts and irrevocable trusts. As their names suggest, a revocable trust can be revoked or changed at any time by the grantor, while an irrevocable trust cannot be changed once it has been created.
Revocable Trusts
A revocable trust is the most popular type of living trust because it offers flexibility to the grantor.
You can name yourself as the trustee so that you can continue to manage your assets during your lifetime.
And if you ever need to make changes to the terms of the trust—for example, if you get divorced or have children later in life—you can do so without having to go through the hassle and expense of creating a new trust document.
Irrevocable Trusts
On the other hand, an irrevocable trust may be right for you if you want more asset protection. Once an irrevocable trust is created, it cannot be revoked or changed by the grantor—even if your circumstances change in the future.
That being said, there are some circumstances in which an irrevocable trust can be modified with court approval, such as if the beneficiary dies or becomes disabled.
Asset Protection Trusts
An asset protection trust is a specific type of irrevocable trust that is designed to shield your assets from creditors—both during your lifetime and after your death.
Usually, this type of trust is only advisable for people with significant assets who are at high risk for lawsuits or other creditors’ claims. For example, business owners or people in high-risk professions such as doctors or lawyers may benefit from setting up an asset protection trust.
As you can see, there are many different types of living trusts in Florida—and which one is right for you depends on your specific circumstances and goals.
If you’re not sure which type of living trust is right for you, or if you have questions about setting up a living trust in general, we encourage you to contact our office to speak with one of our experienced estate planning attorneys. We would be happy to answer any questions you may have about living trusts in Florida.
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