Revocable Living Trusts in Florida

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The average person creating an estate plan usually has little to no understanding of what trusts are, much less what a revocable living trust is. Learn more here: http://kulaslaw.com/estate_planning/index.php/living-trusts/

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  • REVOCABLE LIVING TRUSTS IN FLORIDA

    The Average Person Creating an Estate Plan Usually Has Little to No Understanding

    of What Trusts Are, Much Less What a Revocable Living Trust Is

    ROBERT J. KULAS FLORIDA ESTATE AND MEDICAID PLANNING ATTORNEY

  • Revocable Living Trusts in Florida www.kulaslaw.com 2

    Almost everyone creating an estate plan today

    will benefit by making a revocable living trust.

    Unfortunately, the average person creating a

    plan usually has little to no understanding of

    what trusts are, much less what a revocable

    living trust is. Beginning the estate planning

    process with as much information as possible is

    always a good idea. If you take the time to learn

    some basic concepts, youll be able to not only

    craft a better plan with your estate planning

    lawyer, but you wont feel lost or overwhelmed by the process. To help you

    establish a base of knowledge, here are some key points you should know about

    revocable living trusts.

    YOUR FICTIONAL FRIEND

    To get an idea of what a revocable living trust is, it might be useful to think of an

    imaginary friend, such as one you might have had in your childhood. Revocable

    living trusts are, in many ways, like imaginary friends. Trusts have no physical

    presence. You cant touch them, cant talk to them, and they dont exist outside of

    a piece of paper.

    Nevertheless, revocable living trusts have legal value. The law recognizes these

    tools and allows them the ability to own property. Because of this, revocable

    living trusts play a key role in estate planning. When you create a revocable living

    trust, youll use it as a sort of holding company for your individually owned

    property. Though you will still be able to use, maintain, and benefit from the

    To get an idea of what a revocable living trust is, it might be useful to think of an imaginary friend, such

    as one you might have had in your childhood. Revocable living trusts are, in many ways, like

    imaginary friends.

  • Revocable Living Trusts in Florida www.kulaslaw.com 3

    property transferred into the trust, doing so will give your estate plan significant

    benefits.

    TRUSTS AND PROBATE

    The reason revocable living trusts are so

    important to estate planning is because they

    allow your state to avoid one of the main

    problems it faces. That problem is probate.

    Probate is a legal process in which the

    property you leave behind after you die will

    be inventoried, accounted for, and

    distributed to your legal heirs. Like many

    other legal processes, probate takes a long

    time. It is also highly regulated. There are

    many specific laws and rules that apply

    throughout this process in order to make it

    uniform and fair.

    What that means for the average person is that if you leave behind property that

    has to go through this probate process, your family will not be able to become the

    new legal owner of that property until probate is finished. This can take months,

    and in some cases, even years. Throughout that time, your estate will have to foot

    the bill when it comes to fees and costs associated with this process.

    PROBATE AND YOUR LIVING TRUST

    At this point you might be wondering how a living trust helps your estate avoid

    probate. Its really rather simple. Remember that imaginary friend? Well, because your

  • Revocable Living Trusts in Florida www.kulaslaw.com 4

    imaginary friend has been given legal substance, that friend can continue to exist after

    you die. If you transfer all your property into your friends name, that friend will still be

    the legal owner after youre gone. Because your imaginary friend owns the property and

    not you, there is no reason for probate court to get involved.

    So, by creating your revocable living trust and transferring your property to it, you get

    to avoid probate. Further, because you are the one who creates the revocable living

    trust, you also get to determine the rules under which the trust will operate. This

    includes the ability to determine how the trust will transfer property to your heirs after

    you die. Though this is, in effect, the same way you would transfer property to your

    heirs if you had written a last will and testament, because you are doing it through a

    revocable living trust you dont have to go through probate to do so.

    CREATING THE TRUST

    So, now that you know how living trust let your estate avoid probate, youll need

    to get down to the actual work of creating one. This process isnt too difficult,

    though there are some specific laws

    that apply. Your estate planning

    attorney will guide you through the

    process to ensure that you comply

    with these laws, but in essence all

    you will be doing is creating a

    document that states some

    particular details.

    First, your document will have to

    identify who will serve as the trust beneficiary. The beneficiary is the person who

  • Revocable Living Trusts in Florida www.kulaslaw.com 5

    gets to use the property the trust owns. The great thing about a revocable living

    trust is that you can name yourself as the beneficiary. You can also identify who

    will become the beneficiaries once you die. These beneficiaries will effectively

    inherit the property you leave behind.

    Second, youll have to identify a trustee. A trustee has the duty to manage the

    property the trust owns. Trustees can be almost anyone you choose. However,

    because the property the trust will own is the property you already own, most

    people creating a revocable living trust choose to serve as the trustee themselves.

    So, when you create a living trust you choose yourself as both the beneficiary and

    the trustee. At no time during the trust creation process will you lose control over

    your property or have to choose someone else who will step in to manage it for

    you.

    Finally, youll have to complete the funding process once youve written the trust

    instrument. Funding is simply taking your property and transferring it into the

    trusts name. This can be simple or complicated depending on the type of

    property you wish to transfer. Further, you have to be very careful when you go

    through the funding process. If you make a mistake or leave something out, your

    trust wont be the legal owner. Any property you fail to fund properly will have to

    go through the probate process.

    In our next discussion on living trusts, we will go into more detail about the

    process, how the trusts work, and what you can do to make sure your trust works

    properly. In the meantime, if you have any questions about these tools, talk to

    your estate planning attorney.

  • Revocable Living Trusts in Florida www.kulaslaw.com 6

    About the Author

    Robert J. Kulas

    Robert is the founder and principal shareholder in the Port St. Lucie and Vero Beach law offices of Robert J. Kulas, P.A. Because he believes that helping his clients manage their personal affairs wisely is one of the most worthwhile professional activities he can pursue, he has devoted his practice exclusively to estate planning.

    Robert has invested considerable time and energy helping to educate others in estate planning and is widely regarded as a dynamic speaker

    who can make even the most complex estate planning issues easy to grasp. He provides free monthly seminars to inform the public on the importance of proper estate planning. For over twenty years, thousands of people have come to hear him speak. Helping people understand their options for estate planning is very important to me, Robert said. I like to think that people in our community can look to me for the kind of quality information they need to decide what is best for them and their families.

    About Robert J. Kulas, P.A. Attorneys at Law

    Robert J. Kulas, P.A. Attorneys at Law is a full service estate planning and wealth preservation law firm servicing Port St. Lucie and Vero Beach, Florida.

    The firm is dedicated to providing you with quality estate planning resources, so you can become familiar with all of the existing options. When you visit or call the office, we want you to feel comfortable discussing such an important issue concerning both you and your family. We want to arm you with the information you need to make an informed decision about your family's future.

    www.kulaslaw.com

    East Lake Professional Center

    2100 SE Hillmoor Drive, Suite 105 Port St. Lucie, FL 34952 Phone: (772) 398-0720

    Univest Building 2770 Indian River Blvd., Suite 321

    Vero Beach, FL 32960 Phone: (772) 778-8481

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