The death of a family member or spouse is often one of the most difficult times in a person's life. If that family member neglected to establish a Florida Will or Trust, it permits the State of Florida to decide who will receive the assets of the estate. This problem can be avoided by establishing a Florida Will that directs the courts to decide who will receive the contents of your estate. Additionally, we can assist you by establishing a revocable trust that will avoid the costs and delays of probate and permit you to remain in complete control of your assets.
Q: How do you create a revocable living trust, and how does it work?
A: A revocable living trust is created by having an attorney prepare a “declaration of trust” if you are to be the initial trustee(s), or a “trust agreement” if someone else is to be. The trust document reserves to you the right to change or revoke the trust at any time and establishes how your assets are to be used at your death. It also names the present trustees of the trust (who are the persons who manage the trust and through whom it acts). Most people name themselves as the initial trustees, thereby avoiding fees for others to manage the trust, and then name one or more of the beneficiaries of the trust or a corporate trustee as successor trustee(s) of the trust to take over when the settlors are unable to serve (such as if they are incompetent or deceased). Thus created, the trust is a “paper” entity which is treated legally as if it were a separate person from its creators, but all of the assets of the trust remain under the exclusive control of the settlors while they are alive and competent. If the settlors become incompetent or die, however, the successor they have selected automatically steps in to manage the settlors’ assets for their care as the trust directs in the case of incompetency or to distribute the assets to the beneficiaries named in the trust without the delay, cost and publicity of the court proceedings which would occur if there were no trust.
Q: What assets can I put into a trust
A: Substantially anything: your house and other real estate, your investments and bank accounts, even your business or your collection of Picassos tucked away in the garage.
Q: Can a trust avoid taxes?
A: Most trusts have no income tax effects, and, indeed, there are few remaining opportunities to save income taxes through trusts under current law. Florida has no independent estate and inheritance taxes of its own, and most estates are not liable for federal estate taxes which now have a threshold of $1 million as of January 1, 2011. Because of the threshold, less than two percent of us are exposed to them according to the IRS. IF one’s estate is so exposed, careful gifting using the annual gift tax exclusion and the use of a kind of trust called “bypass” or “credit shelter” or “A-B” trusts can make it possible to leave more than double the threshold amount to non-spouse beneficiaries (any amount can be left to a spouse without taxation). Other options for estate tax or income tax avoidance (or both) include charitable gifts, charitable trust and irrevocable life insurance trusts for those with a need or desire for them.
Gulf Coast Legal Centers handles wills, trusts and estate planning matters in Hillsborough, Hernando, Pinellas, Pasco, Polk, Sumter, Citrus, and Sarasota counties. Contact us today for a free, no obligation consultation so that we can discuss what strategy is the right choice for you.
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