Revocable Living Trusts Lawyers Answer FAQ's About TrustsAvoid Probate - Control Assets
Revocable Living Trusts Lawyers Answer FAQs About Trusts
The following frequently asked questions regarding revocable living trusts should provide the answers to most of your questions. If you have additional questions please call your Jacksonville revocable living trusts lawyers for estate planning, wills and trusts, at 904-448-1969, toll free 888-492-2468, or email us at Info@TheColemanLawFirm.net to schedule your no charge-no obligation estate planning consultation.
1. I have a will. Why would I want a revocable living trust?
Contrary to what you’ve probably heard, a last will and testament may not be the best plan for you and your family. That’s primarily because a last will and testament does not avoid probate when you die. A will must be validated by the probate court before it can be enforced.
Why should I consider a revocable living trust?
Also, because a last will and testament can only go into effect after you die, it provides no protection if you become physically or mentally incapacitated. So the probate court could easily take control of your assets before you die through a probate court supervised guardianship – a concern of millions of older Americans and their families.
Fortunately, there is a proven alternative to a will — the revocable living trust. It avoids probate, and lets you keep control of your assets while you are living — even if you become incapacitated — and provides for the management and distribution of your assets after you die. If you would like for revocable living trusts lawyers to answer your questions about revocable living trusts, please call us at 904-448-1969, or toll free at 866-510-9099, or email us at Info@TheColemanLawFirm.com.
2. What is probate?
What is probate and estate administration?
Probate is the legal process through which the court ensures that, upon your death, your legally enforceable debts are paid, and your assets are distributed according to your wishes, if you have a valid last will and testament. If you don’t have a valid will, your assets are distributed according to the intestacy statute in the state of your residence at the time of you death. Intestacy often does not provide the same plan for the distribution of your assets that you would have provided with your own last will and testament. Revocable living trusts, when properly funded, can avoid the probate process, as well as allow you to control your assets in the event of incapacity.
3. Why should I try to avoid probate?
It can be expensive. Legal fees, executor or personal representative fees and other costs must be paid before your assets can be fully distributed to your heirs. If you own property in more than one state, your family could face multiple probates, each one according to the laws in each state in which you own real property. These costs can vary widely; it might surprise you if you check to see what those expenses are at this time.
It takes time, usually nine months to two years, but often longer. During part of this time, assets are usually frozen so an accurate inventory can be taken. Nothing can be distributed or sold without court and/or executor/personal representative approval. If your family needs money to live on, they must request a living allowance from the probate court, which may be denied, even if the funds are available.
Your family has no privacy. Probate is a public process, so any “interested party” can see at least some of what you owned, whom you owed, who will receive your assets and when they will receive them. The process “invites” disgruntled heirs to contest your will and can expose your family to unscrupulous solicitors and consequent dissipation of assets.
Your family has no control. The probate process determines how much it will cost, how long it will take, and what information is made public. The probate judge, probate law, as expressed in the probate code, and the probate rules of court determine all of the actions that take place in the probate process.
Our revocable living trusts lawyers can answer your questions about how to avoid probate and control your assets during disability and provide for the efficient transfer of your assets at death, at the least amount of professional costs and fees. Call us today for an appointment to see how we can assist you achieve peace of mind with a revocable living trust, at 904-448-1969, or toll free at 866-510-9099, or email us at Info@TheColemanLawFirm.com.
4. Doesn’t joint ownership avoid probate?
Not really. Using joint ownership usually just postpones probate, at best. With most jointly owned assets, when one owner dies, full ownership does transfer to the surviving owner without probate. But if that owner dies without adding a new joint owner, or if both owners die at the same time, the asset must be probated before it can go to the heirs.
Watch out for other problems. When you add a co-owner, you lose control. Your chances of being named in a lawsuit and of losing the asset to a creditor are increased. There could be gift and/or income tax problems. Since a will does not control most jointly owned assets, you could disinherit your family.
There may be adverse estate tax consequences of owning property jointly with right of survivorship, that could cost your family the loss of your estate tax exemption which might cause additional estate taxes of several hundreds of thousands of dollars.
With some assets, especially real estate, all owners must sign to sell or refinance. So if a co-owner becomes incapacitated, you could find yourself with a new “co-owner” — the court–even if the incapacitated owner is your spouse.
Get the answers to all of your questions from our revocable living trusts lawyers by calling (904) 448-1969, or toll free to (866) 510-9099, or email us at Info@TheColemanLawFirm.com.
5. What happens if I become incapacitated? Will the Court take over?
If you can’t conduct business due to mental or physical incapacity (dementia, stroke, heart attack, etc.), only a probate court appointee can sign for you — even if you have a will. (Remember, a will only goes into effect after you die.)
Once the probate court gets involved, it usually stays involved until you recover or die and it, not your family, will control how your assets are used to care for you. This public, probate process, called a “guardianship of the person and property” in Florida, can be expensive, embarrassing, time consuming and difficult to end. It does not replace probate at death, so your family may have to go through probate court twice!
Our revocable living trusts lawyers can show you how to control your assets through the use of a living trust should you develop an incapacity.
6. Does a durable power of attorney prevent this?
A durable power of attorney lets you name someone to manage your financial affairs if you are unable to do so. However, many financial institutions will not honor one unless it is on their form. If accepted, it may work too well, giving someone a “blank check” to do whatever he/she wants with your assets. It can be very effective when used with a living trust, but risky when used alone.
7. What is a revocable living trust?
What is a revocable living trust?
A revocable living trust is a legal document that, just like a will, contains your instructions for what you want to happen to your assets when you die. But, unlike a will, a revocable living trust can avoid probate at death, control all of your assets, and prevent the court from controlling your assets if you become incapacitated.
8. How does a revocable living trust avoid probate and prevent court control of assets at incapacity?
When you set up a revocable living trust, you transfer assets from your name to the name of your trust, which you control — such as from “John and Jane Doe, husband and wife” to “John and Jane Doe, trustees under trust dated (month/day/year).”
Legally you no longer own anything; everything now belongs to your revocable living trust. So there is nothing for the probate courts to control when you die or become incapacitated. The concept is simple, but this is what can keep you and your family out of the probate courts.
Staying out of probate depends on property funding your revocable trust. Our revocable living trusts lawyers provide clear guidance and the assistance of our “funding coordinator” to ensure that your assets are properly titled to your living trusts so that you in fact do avoid probate.
9. Do I lose control of the assets in my revocable living trust?
Will I still have control over my property if I create a revocable living trust?
Absolutely not. You keep full control. As trustee of your revocable trust, you can do anything you could do before — buy and sell assets, change or even cancel your revocable living trust. That’s why it’s called a revocable living trust. You even file the same tax returns. Nothing changes but the names on the titles.
10. Is it hard to transfer assets into my revocable living trust?
What does it mean to fund a trust?
No, and your estate planning attorney, trust officer, financial adviser and insurance agent can help. Typically, you will change titles on real estate, stocks, CDs, bank accounts, investments, insurance and other assets with titles through a process called “funding” your revocable living trust. Most revocable living trusts also include jewelry, clothes, art, furniture, and other assets that do not have titles.
Some beneficiary designations (for example, insurance policies) should also be changed to your revocable living trust so the probate court can’t control them if a beneficiary is incapacitated or no longer living when you die. (IRA, 401(k), etc. can be exceptions.)
Our revocable living trusts attorneys will not only give you expert guidance on the steps to properly fund your living trusts, we have a full time “funding coordinator” who will help you get all of the detail work completed timely so that your revocable trust accomplishes your goal of probate avoidance.
11. Doesn’t this take a lot of time to fund a revocable living trust?
It will take some time — but you can do it now, or you can pay the probate courts and probate attorneys to do it foryou later. One of the benefits of a revocable living trust is that all of your assets are brought together under one plan. Don’t delay “funding” your revocable living trust; it can only protect assets that have been transferred or retitled into it.
12. Should I consider a corporate trustee for my revocable living trust?
You may decide to be the trustee of your revocable living trust. However, some people select a corporate trustee (bank or trust company) to act as trustee or co-trustee now, especially if they don’t have the time, ability or desire to manage their revocable living trusts, or if one or both spouses are ill. Corporate trustees are experienced investment managers, they are objective and reliable, and their fees are usually very reasonable.
13. If something happens to me, who has control of my revocable living trust?
If you and your spouse are co-trustees, either can act and have instant control if one becomes incapacitated or dies. If something happens to both of you, or if you are the only trustee, the successor trustee you personally selected will step in. If a corporate trustee is already your trustee or co-trustee, they will continue to manage your revocable living trust for you.
14. What does a successor trustee of a revocable living trust do?
If you become incapacitated, your successor trustee looks after your care and manages your financial affairs for as long as needed, using your revocable living trust assets to pay your expenses. If you recover, you resume control. When you die, your successor trustee pays your debts, files your tax returns and distributes your revocable living trust assets. All can be done quickly and privately, according to instructions in your revocable living trust, without court interference.
Your successor trustee selection may be the most important decision you make with regard to your revocable trust. The successor trustee is the one who will be charged with the responsibility to follow your directions and instructions for the management and ultimate distribution of your trust assets. Our revocable living trusts lawyers work with you closely to help you choose the most appropriate person, or combination of people, to fulfill your desires with regard to the administration of your revocable trust either during your incapacity or at your death.
15. Who can be successor trustees for my revocable living trust?
Successor trustees can be individuals (adult children, other relatives, or trusted friends) and/or a corporate trustee. If you choose an individual, you should also name some additional successors in case your first choice is unable to act.
16. Does my revocable living trust end when I die?
When a person has a revocable living trust what happens when they die? How long does it take to settle the estate?
Unlike a will, a revocable living trust doesn’t have to die with you. Assets can stay in your revocable living trust, managed by the trustee you selected, until your beneficiaries reach the age(s) you want them to inherit. Your revocable living trust can continue longer to provide for a loved one with special needs, or to protect the assets from beneficiaries’ creditors, spouses and future death taxes.
17. How can a revocable living trust save on estate taxes ('death taxes')?
Your estate will have to pay federal estate taxes if its net value when you die is more than the “exemption” amount at that time. Currently in 2011 and 2012 the federal estate tax is imposed only on estates greater than $5 million for each spouse (a total of $10 million), but it is scheduled to return in 2013 with a $1 million exemption and a 55% tax rate. If you are married, your revocable living trust can include a provision that will let you and your spouse use both of your estate tax exemptions and leave up to $10 million estate tax-free to your loved ones, and $2 million starting in 2013, saving up to $435,000 in federal estate taxes based on current law. (Some states also have their own death or inheritance tax.)
18. Doesn’t a testamentary trust in a will do the same thing as a revocable living trust?
Not quite. A will can contain wording to create a testamentary trust to save estate taxes, care for minors, etc. But, because it’s part of your will, this trust cannot go into effect until after you die and the will is probated. So it does not avoid probate and provides no protection at incapacity.
19. Is a revocable living trust expensive?
Is it expensive to create a revocable living trust?
Not when compared to all of the costs of court interference at incapacity and death. How much you pay will depend primarily on your goals and what you want to accomplish with your revocable living trust.
20. How long does it take to get a revocable living trust?
It should only take a few weeks to prepare the legal revocable living trust documents after you make the basic decisions.
21. Should I have an attorney do my revocable living trust?
Yes, but you need the right attorney. A local attorney who has considerable experience as a revocable living trusts lawyer and estate planner will be able to give you valuable guidance and peace of mind that your revocable trust is prepared and funded properly. If you would like a free estate planning consultation to determine how a revocable living trust can help you achieve your estate planning goals and objectives, please contact The Coleman Law Firm at (904) 448-1969, toll free at 866-510-9099, or by email at Info@TheColemanLawFirm.com, to schedule your appointment.
22. If I have a revocable living trust, do I still need a will?
If I create a revocable living trust, do I still need a will?
Yes, you need a “pour-over” will that acts as a safety net if you forget to transfer an asset to your revocable living trust. When you die, the will “catches” the forgotten asset and sends it into your revocable living trust. The asset may have to go through probate first, but it can then be distributed as part of your overall revocable living trust plan. Also, if you have minor children, a guardian will need to be named in the will.
23. Is a “living will” the same as a living trust?
No. A revocable living trust is for financial affairs. A living will is for medical affairs; it lets others know how you feel about life support in terminal situations.
24. Are revocable living trusts new?
No, they’ve been used successfully for more than six hundred years.
25. Who should have a revocable living trust?
Age, marital status and wealth don’t really matter. If you own titled assets and want your loved ones (spouse, children or parents) to avoid probate court interference at your death or incapacity, you should probably have a revocable living trust. You may also want to encourage other family members to have one so you won’t have to deal with the probate courts at their incapacity or death. If you would like to meet with our revocable living trust lawyers to discuss how a living trust can help you achieve your estate planning goals, please call us at (904) 448-1969, toll free at 866-510-9099, or email us at Info@TheColemanLawFirm.com.
26. Summary of Revocable Living Trust Benefits
Avoids probate at death, including multiple probates if you own property in other states
Prevents court control of assets at incapacity
Brings all of your assets together under one plan
Provides maximum privacy
Quicker distribution of assets to beneficiaries
Assets can remain in trust until you want beneficiaries to inherit
Can reduce or eliminate estate taxes
Inexpensive, easy to set up and maintain
Can be changed or cancelled at any time
Difficult to contest
Prevents court control of minors’ inheritances
Can protect dependents with special needs
Prevents unintentional disinheriting and other problems of joint ownership
Professional management with corporate trustee
Peace of mind