What is Revocable Trust?

A revocable trust is a document (the “trust agreement”) created by you to manage your assets during your lifetime and distribute the remaining assets after your death. As the person who creates the trust and also is responsible for the management of the trust assets you are considered both the “Grantor” and the initial “Trustee.”

The main benefits of a revocable living trust are:

1. Succession planning – permitting your successor trustee to assume management of your assets and debts which avoids court administered guardianship in the event of the grantor’s incapacity during lifetime; and
2. the avoidance of probate upon the grantor’s death.

In drafting a trust for you and your family, you may choose to appoint yourself, another person, bank or trust company to serve as your trustee immediately or as a “successor trustee” who will assume responsibility for managing your assets if you resign, become incapacitated, or pass away. Additionally, the trust is “revocable” permitting you may modify or terminate the trust during your lifetime, as long as you are not incapacitated.

One of the advantages of a revocable trust is to permit a successor trustee to assume responsibility seamlessly to manage your trust assets, pay your bills, and make investment decisions trustee during your lifetime if you are unable to do so.

Upon your death, the trustee (or your successor if you were the initial trustee) is responsible for paying all claims and taxes, and then distributing the assets to your beneficiaries as described in the trust agreement.

Setting up a revocable trust takes more time and effort initially, as opposed to simply having a will drafted for you family’s use in Probate Court after your death. With a Revocable trust, your assets, such as bank accounts, investments, and possibly real estate must be formally transferred to the trust before your death to get the maximum benefit from the trust. This process is called “funding” the trust and requires changing the ownership of the assets to the trust. Assets that are not properly transferred to the trust may be subject to probate and will be duplicative effort by your designated personal representatives and more expensive too. Therefore, if you choose to work with a revocable trust, please assure that you follow the funding instructions provided by our office.

You will also be reminded that certain retirement funding assets should not be transferred to a trust because tax problems may result.

We will guide you through the process, provide written trust funding instructions to you and be available for your questions.

Documents to Protect You During Your Life:

Documents that protect you during your lifetime are just as important as a Last Will and Testament. In our Law Practice, we will help you gain additional peace and security if you should be in a position to require your family and friends help because of a medical condition or any other debilitating occurrence.  When you work on your Estate Plan, it must also include the following:

• Living will: Florida statutes now provide for a written declaration by an individual specifying directions as to use of life-prolonging procedures.
• Power of attorney: This document can assist in handling your property if you become incapacitated, without having to open a guardianship proceeding in court. This is especially valuable for paying your bills and protecting your assets. A power of attorney is no longer valid or enforceable after your death.
• Health care surrogate: Florida law now allows you to designate a person to make health care decisions for you when you may not be able to do so. Included in this important appointment is the power to decide when to withdraw medical procedures.
• Pre-need guardian designation: Florida law allows you to designate a person who could be appointed guardian over you and/or your children should you become incapacitated or upon your death. If you fail to designate a guardian, the court will do so for you if it becomes necessary.

What is a Will?

A will is a written direction controlling the disposition of property at death. The laws of each state set the formal requirements for a legal will. In Florida:

• You, the maker of the will (“testator”), must be at least 18 years old.
• You must be of sound mind at the time you sign your will.
• Your will must be written.
• Your will must be witnessed and notarized in the special manner provided by law for wills.
• It is necessary to follow exactly the formalities required by Florida law for the execution of a will.
• To be effective, your will must be proved valid in and allowed by the probate court.

No will becomes final until the death of the testator, and it may be changed or added to by the testator by drawing a new will or by a “codicil,” which is simply a separately written addition or amendment executed with the same formalities as a will. A will’s terms cannot be changed by writing something in or crossing something out after the will is executed. In fact, writing on the will after its execution may invalidate part of the will or all of it.

What Can be Accomplished by a Will?

Through a will, you decide who gets your property instead of the law making the choice for you. You may name the personal representative (“executor”) of your will as you choose, provided the one named can qualify under Florida law. A personal representative is one who manages an estate, and it may be either an individual or a bank or trust company, subject to certain limitations. A trust may be created in your will whereby the estate or a portion of the estate will be kept intact with income distributed to or accumulated for the benefit of members of the family or others. Minors can be cared for without the expense of proceedings for guardianship of property. Real estate and other assets may be sold without court proceedings, if your will adequately authorizes it.

You may make gifts, effective at or after your death, to charity.

You decide who bears any tax burden, rather than the law making that decision.

A guardian may be named for minor children.

What Happens When There is No Will?

If you die without a will (this is called dying “intestate”), your property will be distributed to your heirs according to a formula fixed by law. Your property does not go to the state of Florida unless there are absolutely no heirs at law, which is very unlikely. In other words, if you fail to make a will, the inheritance statute determines who gets your property. The inheritance statute contains a rigid formula and makes no exception for those in unusual need.

When there is no will, the court appoints a personal representative, known or unknown to you, to manage your estate. The cost of probate may be greater than if you had planned your estate with a will, and the administration of your estate may be subject to greater court supervision.

How Long is a Will Good?

It is “good” until it is changed or revoked in the manner required by law. Your will may be changed as often as you desire while you are sane and not under undue influence, duress or fraud, provided it is changed in the required manner. Changes in circumstances after the execution of the will, such as tax law amendments, birth of children, deaths, marriage, divorce or even a substantial change in the nature or amount of your assets, may raise questions as to the adequacy of your will. All changes require a careful analysis and reconsideration of all the provisions of your will and may make it advisable to change the will to conform to the new situation.

Is a Trust a Substitute For a Will?

No, in most situations. A trust may be used in addition to a will. This is because a trust can handle only the property that has been put into it. Any property of yours that is not placed in the trust either during life or at death in most instances escapes the control of the trust. It is the will that controls all property in your name at the time of death if the will is drafted properly.

Trusts can be helpful to speed administration and save taxes if they are drafted properly and funded during life with the property intended to be transferred by the trust. Often, however, improperly drafted or incorrectly funded or administered trusts can add to the cost of settling estates, not lower it. Furthermore, it is the probate of the will that can clear creditors’ claims, which is not possible with just a trust administration.

Who Should Prepare a Will?

You wouldn’t employ “just anyone” to fill teeth, take out an appendix, or deliver a baby. Except in a dire emergency, such important tasks should not be performed by anyone except the trained professional. The drafting of a will involves making decisions that require professional judgment that can be obtained only by years of training, experience and study. Only the practicing lawyer can avoid the innumerable pitfalls and advise the course best suited for your individual situation. In addition, an experienced attorney will be able to coordinate the use of other skilled professionals, such as an investment adviser, actuary, insurance specialist and tax accountant, to complete a proper estate plan.

Moreover, there is no such thing as a “simple will.” Even smaller estates can have complexities foreseeable only by the experienced attorney.

Relocated to Florida?

If you have moved to Florida from another state, it is wise to have your will reviewed by a Florida lawyer in order to be sure that it is properly executed according to the laws of Florida, that the witnesses are readily available to prove your will in Florida, and that your personal representative is qualified to serve in Florida.

Before your will is effective to dispose of your property, it must be proved in the probate court. If the will is self-proving and otherwise valid, it may be admitted to probate without further proof. If the will is not self-proving, it generally must be proved by the oath of one of the witnesses. The oath must be given before a circuit judge, clerk of court or a commissioner specially appointed by the court for that purpose. (Under certain circumstances, the court may permit the will to be proved by other means permitted by law.) A will can be made self-proving either at the time of its execution or later, which saves the time and expense of locating a witness and obtaining the witness’ oath after your death. For your will to be made self-proving, you must acknowledge the will before an officer authorized to administer oaths; the witnesses must make affidavits before the officer; and the officer must evidence the acknowledgment and affidavits by a certificate attached to or following the will. An appropriate form of certificate is prescribed by Florida law. The self-proving procedure is in addition to the normal execution and witnessing of the will, not in place of it.

No matter how perfect a will may be prepared for you, unless it is properly executed in strict compliance with the laws of Florida, the will may be entirely void. Be sure that you execute your will in the presence of your attorney, who knows exactly how and in what order the will should be signed.

Every person owning property who wishes to exercise control in the disposition of that property after death should have a will, regardless of the value of the property. Of course, the larger the estate the greater the tax consequences.