This is the next article in my series on the use of a living trust when creating a Florida estate plan. My last article discussed how a living trust can be used to manage investment real estate. The use of such an instrument allows for the property to be maintained, within the trust, and for heirs to receive continuing payments from rent and appreciation. An experienced attorney can help with ensuring that, if this is your goal, that your affairs are structured correctly. In this article I will be continuing my prior discussion by explaining how a living trust can provide greater flexibility to an estate plan. If you or a loved one are in need of assistance then contact my office today to speak with a Melbourne lawyer.
Floridians can use a living trust to set conditions on an inheritance or to allow for the maintenance of assets
One who creates a living trust is known as a “grantor.” When the instrument is created, they typically place all of their assets into the trust. These assets are then managed by a “trustee,” a role that the grantor typically assumes personally. This arrangement allows for the grantor to continue to enjoy the use of their assets. When the grantor passes away then a “successor trustee,” who is named in the trust, takes over management of the assets. The successor trustee is required to follow the terms and requirements of the trust. As the trust continues to exist, after the passing of the grantor, there is no need for the assets within the trust to go through the probate process.
A living trust provides greater flexibility than does simply having a last will and testament. The latter requires that assets go through probate and that all matters be fully settled before the estate can be closed. This means, for example, that all assets must be sold or passed to the heirs immediately. There is no way to maintain the assets or set conditions on an inheritance. With a living trust, however, the terms of the trust can state that heirs are not to receive a distribution of assets until certain requirements are met. Also, as explained in our last article, assets such as a rental real estate may be held in the trust long term for the benefits of the heirs. This provides a wide range of options for planning one’s affairs.
Consider the following example. Joe owns a large Florida real estate portfolio as well as his residence. He places all of these items in a living trust. The terms of the trust require that the real estate be held and managed for a period of at least twenty years after his death. It also provides that rent proceeds may be used to pay private school tuition, and college tuition, for any of his grandchildren. All remaining proceeds are to be divided between his surviving children each month. At the end of the twenty years, the trust also states that all properties are to be sold with the proceeds going to his surviving children or their heirs if they are deceased. Joe also maintains a large amount of cash in the trust. The trust provides that each of his grandchildren will receive a $50,000 payment upon graduating from college. If a grandchild does not graduate from college, then their money will be distributed amongst the surviving children when the real estate is liquidated. This type of long term planning would not be possible if Joe only had a will.
Contact a Melbourne estate planning lawyer to determine if a living trust is your best option
As discussed above, the benefits of utilizing a living trust can be substantial. It should be understood, however, that there are situations in which such an instrument may not be the best option. This can include instances in which the assets are illiquid, those where there may not be a suitable successor trustee, and more. Discussing your situation with counsel is an important step towards creating an estate plan which meets both your needs and your goals. I am a Melbourne estate planning lawyer who is able to assist with the creation of a living trust. I will analyze your situation and suggest the best option going forward. To schedule a consultation, contact my office online or by telephone. I look forward to speaking with you.
My firm also services Florida clients in the Brevard County cities of Titusville, Cocoa, Palm Bay, Grant, Valkaria, and Rockledge, as well as in the Indian River County areas of Fellsmere, Sebastian, Vero Beach, Indian River Shores, and Orchid. We are also able to virtually work with clients throughout the state.