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The Revocable Trust in Florida  
Frequently Asked Questions

 The revocable, or “living,” trust is often promoted as a means of avoiding probate and saving taxes at death. The revocable trust has certain advantages over a traditional will, but there are many factors to consider before you decide if a revocable trust is best suited to your overall estate plan.

WHAT IS A REVOCABLE TRUST?

WHAT IS PROBATE?

ARE ALL ASSETS SUBJECT TO PROBATE?

HOW DOES A REVOCABLE TRUST AVOID PROBATE?

HOW DO I KNOW IF MY ASSETS ARE PROPERLY TITLED TO MY REVOCABLE TRUST?

CAN THE TRUST HOLD TITLE TO MY HOMESTEAD?

DO I BENEFIT BY AVOIDING PROBATE?

HOW ARE CREDITORS SATISFIED?

DOES THE TRUST PROVIDE PROTECTION FROM CREDITOR CLAIMS?

DOES THE TRUST PROVIDE PROTECTION FROM THE ELECTIVE SHARE?

WHO PAYS FEDERAL INCOME TAX ON TRUST INCOME?

WHAT ARE THE TRUSTEE'S RESPONSIBILITIES?

WHO MAY ACT AS TRUSTEE OR SUCCESSOR TRUSTEE?

HOW DO I KNOW IF A REVOCABLE LIVING TRUST IS WHAT I NEED?

WHAT IS A 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. The person who creates a trust is called the “grantor” or “settlor.” The person responsible for the management of the trust assets is the “trustee.” You can serve as trustee, or you may appoint another person, bank or trust company to serve as your trustee. The trust is “revocable” since you may modify or terminate the trust during your lifetime, as long as you are not incapacitated.

During your lifetime the trustee invests and manages the trust property. Most trust agreements allow the grantor to withdraw money or assets from the trust at any time, and in any amount. If you become incapacitated, the trustee is authorized to continue to manage your trust assets, pay your bills, and make investment decisions. This may avoid the need for a court-appointed guardian of your property. This is one of the advantages of a revocable trust.

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. The trustee’s responsibilities at your death are discussed below.

Your assets, such as bank accounts, real estate and investments, 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. However, certain assets should not be transferred to a trust because income tax problems may result. You should consult with your attorney, tax advisor and investment advisor to determine if your assets are appropriate for trust ownership.  (Back to Top)

WHAT IS PROBATE? 

Probate is the court-supervised administration of a decedent’s estate. It is a process created by state law to transfer assets from the decedent’s name to his or her beneficiaries. A personal representative is appointed by the Florida probate court to handle the probate estate administration. The probate process ensures that creditors, taxes and expenses are paid before distribution of the probate estate assets to the beneficiaries. The personal representative is accountable to the probate court as well as the estate beneficiaries for his or her actions during the administration. For Florida probate estates having less than $75,000 of non-exempt assets, Florida probate law provides a simplified probate procedure, known as summary administration. (Back to Top)

ARE ALL ASSETS SUBJECT TO PROBATE? 

No, only assets owned by a decedent in his or her individual name require probate. Assets owned jointly as “tenants by the entirety” with a spouse, or “with rights of survivorship” with a spouse or any other person will pass to the surviving owner without probate. This is also true for assets with designated beneficiaries, such as life insurance, retirement accounts, annuities, and bank accounts and investments designated as “pay on death” or “in trust for” a named beneficiary. Assets held in a living trust will also avoid Florida probate.  (Back to Top)

HOW DOES A REVOCABLE LIVING TRUST AVOID PROBATE IN FLORIDA? 

A revocable living trust avoids probate by effecting the transfer of estate assets during your lifetime to the trustee of the living trust. This avoids the need to use the Florida probate process to make the transfer after your death. The trustee of the living trust has immediate authority to manage the revocable trust assets at your death; appointment by the Florida probate court is not necessary.

The “funding” of a revocable trust is critical to successfully avoid probate. Those persons who do not fully fund their revocable trusts often need both a Florida probate administration for the non-trust assets as well as a living trust administration to completely distribute the assets of the estate. Because the revocable trust may not completely avoid probate, a simple “pour over” will is needed to transfer any probate assets to the living trust after death. (Back to Top)

HOW DO I KNOW IF MY ASSETS ARE PROPERLY TITLED TO MY REVOCABLE TRUST? 

The account statement, stock certificate, title or deed will make some reference to the revocable trust or to you as trustee of your living trust. You might also elect to fund your revocable trust by naming the living trust as a beneficiary of life insurance or other similar arrangements. Your estate planning or trust attorney and financial advisor may assist you with the transfer of assets to your revocable trust. If your living trust will own real estate then it is important to have the deed prepared by a qualified estate planning attorney. The estate planning attorney will consider the impact of existing mortgages, title issues and Florida exempt homestead restrictions when the real estate deed transferring the real property into your revocable trust is prepared. (Back to Top)

CAN THE LIVING TRUST HOLD TITLE TO MY EXEMPT FLORIDA HOMESTEAD? 

In some situations your exempt Florida homestead property can be transferred to your revocable trust. Most Florida counties have special requirements to maintain the homestead tax exemption and special language may be required in the living trust agreement and the real estate deed transferring title of the real property to the revocable trust. Your estate planning attorney can advise you on whether placing your exempt Florida homestead in your living trust is appropriate, and if so, the requirements for a valid transfer. (Back to Top)

DO I BENEFIT BY AVOIDING PROBATE? 

Avoiding probate may lower the cost of administering your estate and time delays associated with the Florida probate process. However, many of the costs and time delays associated with Florida probate process, such as filing a federal estate tax return, will also be necessary with a revocable trust. The administration of a revocable trust after death is similar to a probate administration. The trustee must collect and value the trust assets, determine creditors and beneficiaries, pay taxes and expenses, and ultimately distribute the trust estate. A trustee is entitled to a trustee's fee for administration of the trust, as is the personal representative of a probate estate. To the extent professional services of estate planning and trust attorneys, accountants and estate liquidators are used to complete the process, the savings may be marginal.

On the other hand, avoiding probate in multiple states is a definite benefit. Because of the nature of real estate, probate is usually required in every state in which you own real estate. This can usually be avoided by transferring ownership of the real estate to your living trust during your lifetime. (Back to Top)

HOW ARE CREDITORS SATISFIED? 

Florida’s trust law does not have a specific procedure for identifying and paying creditors at death. The creditors have up to 2 years from the decedent’s death to file claims against the probate estate. The trustee may be reluctant to distribute the trust assets to the beneficiaries until he or she is satisfied that all claims have been paid, and 2 years is a long time to wait. For this reason, some clients choose to open a Florida probate estate in addition to the revocable trust administration to take advantage of the Florida probate claim process. The Florida probate law limits the time for creditors to file claims against the probate estate (generally 3 months from the date of notice), and also provides a process for objecting to claims that are filed with the Florida probate court against the estate.(Back to Top)  

DOES THE REVOCABLE LIVING TRUST PROVIDE PROTECTION FROM CREDITOR CLAIMS? 

In Florida, the trust assets are not protected from the claims of your creditors. During your lifetime the assets in a revocable trust are treated as owned by you, and subject to the claims of your creditor as if you owned them in your personal name. If the revocable trust assets remain in trust after your death, the interests of the beneficiaries may be protected from their creditors by a “spendthrift” provision in the living trust agreement. Florida law provides special protection for many types of assets, including assets owned by a husband and wife as “tenants by the entirety.” Consideration should be given to these assets when you decide how to fund your revocable trust. Your estate planning attorney can advise you on the types of assets that offer creditor protection and the effect of funding your revocable trust with them.(Back to Top)

DOES THE TRUST PROVIDE PROTECTION FROM THE ELECTIVE SHARE? 

Florida law provides that a surviving spouse is entitled to a minimum portion of the decedent’s estate. This
elective share is equal to 30% of the estate, including certain assets passing outside of probate. Generally, assets held in a revocable trust will be subject to the elective share. There are some exceptions to the elective share, and the right to receive an elective share can be waived by the spouse. You should consult with your attorney regarding the application of the elective share to your particular situation.  (Back to Top)

WHO PAYS FEDERAL INCOME TAX ON TRUST INCOME? 
In most instances, the revocable trust is ignored for federal income tax purposes during the grantor’s lifetime. The income and deductions are reported directly on your individual income tax return. The trust will use your social security number as its tax identification number.

A revocable trust becomes a separate entity for federal income tax purposes when it becomes irrevocable, or stops reporting income under your social security number for any other reason. The trustee is then required to file an annual fiduciary income tax return. Taxable income, deductions and credits are determined in much the same way as for an individual. Trusts are also allowed a deduction for distributions to beneficiaries. In this way, the trust passes on income and deductions to the beneficiaries to be taxed on their personal income tax returns. Income that is not distributed to the beneficiaries is taxable to the trust. (Back to Top)

DOES A REVOCABLE TRUST SAVE ESTATE TAXES? 

Revocable living trusts are often credited with saving estate taxes, but this is not entirely accurate. Your retained interest and power over the trust assets will cause the revocable trust to be included in your taxable estate at death. The revocable living trust can be drafted to minimize the effect of
estate taxes, but the same estate planning techniques are available to persons who choose to use a last will and testament as those who choose a revocable living trust.(Back to Top)

WHAT ARE THE TRUSTEE'S RESPONSIBILITIES? 
Serving as trustee is no simple task. While very important, the prudent investment of trust assets is not a trustee’s only responsibility. Your trustee’s exact powers and duties will depend on the instructions in your trust agreement. But, in general, your trustee will:

  • Hold trust property
  • Invest the trust assets 
  • Distribute trust income and/or principal to the beneficiaries, as directed in the trust agreement
  • Make tax decisions concerning the trust
  • Keep records of all trust transactions
  • Issue statements of account and tax reports to the trust beneficiaries
  • Answer any questions you and the beneficiaries may have concerning the trust

Your trustee may have broad powers or very limited powers. In either case, your trustee is a fiduciary and must follow a strict standard of care when performing trust functions(Back to Top)

WHO MAY ACT AS TRUSTEE OR SUCCESSOR TRUSTEE? 

The choice of a trustee is extremely important, and may have tax consequences. You can name almost anyone as your trustee. Unlike the appointment of a personal representative of a Florida probate estate, a trustee does not have to live in Florida or be related to you. You can name yourself or any other individual (subject to tax considerations), or a corporate trustee, such as a bank or trust company. The individual trustee can be a family member, friend or professional advisor. Many individuals appoint family members or friends as successor trustee, to assume responsibility for the trust management and distribution after their death. When a family member or friend is chosen, consideration must be given to the person’s qualifications, the potential for friction with other trust beneficiaries, and the potential burden you are placing on that individual. The revocable trust agreement should allow these individuals to hire qualified professionals to assist them in their duties, such as attorneys, accountants and financial advisors. (Back to Top) 

HOW DO I KNOW IF A REVOCABLE LIVING TRUST IS WHAT I NEED? 

This information is intended to give you a basic understanding of revocable living trusts in Florida, but it cannot substitute for a thorough review with your estate planning attorney. A revocable trust must be implemented as part of an overall estate plan. Ownership of assets must be coordinated between the individual and the revocable living trust. Decisions must be made as to what assets are appropriate to fund the living trust, the transfers must then occur, and the asset allocation should be periodically reviewed. Tax considerations must be discussed with qualified income tax and estate tax professionals. The revocable trust agreement should reflect your family, economic and tax goals. A revocable trust can help you accomplish these goals when properly prepared and implemented.(Back to Top) 

Florida Counties and cities in which Miami Florida estate planning, elder law, guardianship and probate lawyers and attorneys offer Miami Florida estate planning, elder law, guardianship and probate services:

Alachua  trust lawyers

Gainesville, Alachua, Hawthorne, High Springs, Waldo, Newberry, Micanopy

Bay  

Panama City, Panama City, Beach, Lynn Haven, Youngstown

Baker  

Macclenny, Glen Saint Mary

Bradford  

Starke, Brooker, Hampton

Brevard  trust attorneys

Cocoa, Cocoa Beach, Merritt Island, Titusville, Melbourne, Palm Bay, Cape Canaveral, Satellite Beach, Rockledge, Barefoot Bay, Indialantic, Malabar

Broward   County trust attorneys

Ft. Lauderdale, Davie, Sunrise, Weston, Coral Springs, Pompano Beach, Hollywood, Hallendale, Plantation, Dania Beach, Coconut Creek, Deerfield Beach, Lauderhill, Lighthouse Point, Margate, Miramar, Oakland Park, Pembroke Pines, Tamarac, Wilton Manors, Hillsboro Beach, Pembroke Park, Cooper City, Port Everglades, Sea Ranch Lakes, Southwest Ranches

Calhoun  

Blountstown

Charlotte  

Punta Gorda, Charlotte, Port Charlotte, Palm Island

Citrus  

Crystal River, Homosassa Springs, Inverness

Clay  

Orange Park, Middleburg, Green Cove Springs, Keystone Heights, Penny Farms

Collier  

Naples, Marco Island, Everglades City, Golden Gate, Immokalee, Palm River Estates, Ochopee

Columbia  

Lake City, Fort White

DeSoto  

Arcadia, Brownville, Fort Ogden, Hull, Pine Level, Platt

Dixie  

Cross City, Horseshoe Beach, Old Town

Duval County trust attorneys

Jacksonville, Jacksonville Beach, Atlantic Beach, Neptune Beach

Escambia  

Pensacola

Flagler  

Palm Coast, Flagler Beach, Bunnell, Beverly Beach, Marineland

Franklin  

Apalachicola

Gadsden  

Quincy, Chattahoochee

Gilchrest  

Trenton

Glades  

Moorehaven

Gulf  

Port St. Joe, Wewahitchka

Hamilton  

Jasper, White Springs

Hardee  

Wauchula

Hendry  

Clewiston, LaBelle

Hernando  

Brooksville, Weeki Wachi

Highlands  

Avon Park, Sebring, Lake Placid, Leisure Lakes

Hillsborough County trust attorneys  

Tampa, Plant City, Temple Terrace, Apollo Beach, Brandon, Lutz, Ruskin, Sun City Center, Riverview, Dover, Thonotosassa, Ybor City

Holmes  

Bonifay

Indian River  

Vero Beach, Indian River Shores, Fellsmere, Sebastian

Jackson  

Marianna

Jefferson  

Monticello

Lafayette  

Mayo

Lake  

Altoona, Clermont, Eustis, Fruitland Park, Lady lake, Leesburg, Minneola, Mount Dora, Tavares, Umatilla

Lee County

Fort Myers, Bonita Springs, Cape Coral, Fort Myers Beach, Sanibel, Boca Grande, Estero, San Carlos Park, Lehigh Acres, Waterway Estates

Leon  

Tallahassee

Levy  

Bronson, Cedar Key, Chiefland, Williston, Yankeetown

Liberty  

Bristol

Madison  

Madison

Manatee  

Bradenton, Anna Maria Island, Bradenton, Holmes Beach, Longboat Key, Palmetto, Myakka City

Marion  

Ocala, Leesburg, Belleview, Citra, Dunnellon, Salt Springs, Weirsdale

Martin  

Stuart, Sewall’s Point, Hobe Sound, Jensen Beach, Jupiter Island, Ocean Breeze Park, Palm City

Miami-Dade Trust attorneys  

Miami, Coral Gables, Coconut Grove, South Miami, Kendall, Homestead, North Miami, North Miami Beach, Miami Beach, Hialeah, Miami Shores, Miami Lakes, Aventura, Bal Harbour, Bay Harbor Islands, Hialeah Gardens, Key Biscayne, Pinecrest, Surfside, Cutler Bay, Doral, Golden Beach, Indian Village, Islandia, Medley, Miami Gardens, North Bay Village, Sunny Isles Beach, Sweetwater, Virginia Gardens, Florida City, Goulds, Biscayne Park

Monroe County Trust lawyers

Key West, Islamorada, Key Largo, Marathon, Big Pine Key, Key Colony Beach, Sugarloaf Key, Tavernier

Nassau  

Fernandina Beach, Amelia Island, Hilliard, Yulee, Callahan

Okaloosa  

Fort Walton Beach, Niceville, Cinco Bayou, Destin, Shalimar Valparaiso

Okeechobee  

Okeechobee

Orange   County trust attorneys

Orlando, Lake Buena Vista, Apopka, Edgewood, Maitland, Ocoee, Windemere, Winter Garden, Winter Park, Zellwood

Osceola  

Kissimmee, St. Cloud, Celebration

Palm Beach  

Palm Beach, West Palm Beach, North Palm Beach, Lake Worth, Boca Raton, Delray Beach, Boynton Beach, Greenacres, Highland Beach, Hypoluxo, Juno Beach, Jupiter, Lake Park, Lantana, Ocean Ridge, Palm Beach Gardens, Royal Palm Beach, Wellington, Pahokee, Tequesta, Riviera Beach, Loxahatchee, Manalapan, Ocean Ridge, Glen Ridge

Pasco  

New Port Richey, Bayonet Point, Gulf Harbors, Dade City, Holiday, Hudson, Land O’Lakes, Odessa, St. Leo, Zephyrhills

Pinellas  

St. Petersburg, Clearwater, Dunedin, Gulfport, Largo, Oldsmar, Pinellas Park, Safety Harbor, Tarpon Springs, Treasure Island, Belleair, Madeira Beach, North Redington Beach, Seminole, Indian Rocks Beach                              

Polk  

Lakeland, Auburndale. Bartow, Eagle Lake, Fort Meade, Haines City, Lake Alfred, Lake Wales, Winter Haven, Frostproof, Polk City, Highland Park, Indian Lake Estates

Putnam  

Palatka, Interlachen

Santa Rosa  

Gulf Breeze, Milton

Sarasota  

Sarasota, Longboat Key, North Port, Venice

Seminole  

Altamonte Springs, Casselberry, Lake Mary, Longwood, Oviedo, Sanford, Winter Springs

St. Johns  

St. Augustine, St. Augustine Beach, Ponte Vedra Beach, Nocatee, Crescent City, Melrose, Pomona Park, Welaka

St. Lucie

Fort Pierce, Port St. Lucie

Sumter  

Wildwood, Bushnell, The Villages

Suwannee  

Live Oak

Taylor  

Perry, Steinhatchee

Union  

Lake Butler

Volusia  

Daytona Beach, Ormond Beach, New Smyrna Beach, Deland, Deltona, Edgewater, Holly Hill, Ponce Inlet, Port Orange

Wakulla

            

Walton  

DeFuniak Springs, Seaside

Washington  

Chipley

 

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