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WHY SETTING UP A LIVING TRUST MAY BE UNNECESSARY
Many people try to avoid learning anything about trusts, wills, and probate. Who wants to think about something so closely associated with death? Nevertheless, you should take the time to learn the essentials about wills and living trusts, especially if your loved ones rely on you. If you are unfamiliar with the essentials you should sit down with a West Palm Beach estate planning attorney to get a better understanding.
For many people, living trusts are a practical tool for distributing property and assets to loved ones while avoiding the cost and inconvenience of probate. But is a living trust right for you? Keep reading, and you’ll find out why a living trust may – or may not – be the answer for you.
You probably know that probate is the legal process of distributing a deceased person’s property and assets after death. Probate is conducted by a probate court, and it can be a long, costly procedure, especially if a deceased person’s estate is complicated.
WHAT DOES PROBATE DO?
Probate settles and completes a deceased person’s financial affairs. In Florida, if you die without a last will and testament or a living trust, probate is the process that identifies and gathers your assets, pays your taxes and debts, and distributes the remaining assets to your beneficiaries.
In Florida, non-probate property includes homestead property, bank accounts and homes with the ownership shared by more than one person, assets with designated beneficiaries (like life insurance policies and retirement and savings accounts), and any assets held in a living trust.
Probate assets include bank accounts and investment accounts in the decedent’s name alone, annuity contracts, personal assets such as jewelry or art, and real estate owned by the decedent (except for homestead property).
WHAT ARE THE ADVANTAGES (AND DRAWBACKS) OF LIVING TRUSTS?
Living trusts have grown popular in recent years as an alternative to wills. A living trust allows you to skip probate, but depending on your marital status, your age, and the complexity of your estate, you may not need to create a living trust. A last will and testament may be sufficient.
Your last will and testament may be rewritten, modified, or revoked at any time, provided that you are not mentally incapacitated, but a living trust takes longer to create, involves more maintenance, and is more difficult to modify than a last will and testament.
In fact, if you create a living trust, it’s probably smart also to draft a last will and testament as a backup document. Whether you should create a living trust or a last will and testament – or both – will depend on your personal circumstances.
That’s one reason why you should have the personalized advice of a West Palm Beach estate planning attorney.
IS A LIVING TRUST RIGHT FOR YOU?
To determine if you need to create a living trust, consider these three factors, and discuss them with your estate planning attorney:
- Your age: The young and healthy probably have decades before they need to be concerned about probate. For anyone who is under 55 and in good health, creating a will is quicker, less costly, easier to maintain, and for most people, sufficient for your needs.
- Your estate: The more you own, the more your heirs could lose in probate. Especially if your estate is extensive and/or complicated, you should probably consider a living trust – at any age.
- Your marital status: If you and your spouse are leaving your assets and properties to one another, and your assets are, for the most part, jointly owned, a living trust probably is not necessary.
HOW DOES A LAST WILL AND TESTAMENT WORK?
A last will and testament is a legally-binding document that lets you leave instructions for the distribution of your property and assets.
It also lets you name a guardian for your minor children – should the worst happen – and it lets you name an executor of your estate, so that your affairs are handled by someone you trust. If you have pets, a will allows you to leave instructions regarding how they will be cared for.
A last will and testament goes through the probate process, and as a court record, that process makes your personal financial business available to the public. If your estate is modest, privacy may not be a concern, but if your estate is substantial, you may need to establish a living trust.
In several ways, a living trust is comparable to a will. A living trust lets you leave instructions about how your property and assets are to be distributed and who will act as the guardian to your minor children. Living trusts also let you name a trustee to carry out your wishes on your behalf.
WHAT’S THE ROLE OF AN ESTATE PLANNING ATTORNEY?
In south Florida, when you are ready to draft a living trust or a will – or if you want to learn more and receive some personalized advice – you will need to consult with an estate planning lawyer who is thorough, pays attention to details, and is committed to protecting your interests.
Why do you need the services of an estate planning lawyer when you can download or purchase blank forms to create your own last will and testament or living trust? Probate and tax laws, as you already know, are immensely complicated, and if you make a mistake, it could cost you.
In fact, all kinds of disputes and difficulties can emerge if you do not have the guidance and helpful insights that a good estate planning lawyer can provide.
WHAT MAKES FOR A SOUND, EFFECTIVE ESTATE PLAN?
Good estate planning requires a comprehensive familiarity with wills, trusts, tax laws, and Florida probate law. When you meet with an estate planning attorney, speak up, ask questions, and disclose anything that may be important to the estate planning process.
Consider putting a list of questions in writing for your first estate planning session. Estate planning is a process where the details can make the difference.
If you own your home and/or your own business, or if your loved ones rely on you, it might be wise to start the estate planning process now. Good estate planning cannot be done casually or quickly, and no one knows what tomorrow may bring.
A West Palm Beach estate planning attorney can help you with a living trust, a last will and testament, asset protection, probate advice, and other estate planning options and services.
Read more from our recent blog: WHAT YOU SHOULD KNOW ABOUT A POWER OF ATTORNEY