In Florida estate planning, a commonly used instrument is a "Living Trust" (also called a "Revocable Trust" or a "Revocable Living Trust"). In this blog, we will simply call it a "Trust." There are multiple benefits accomplished by establishing a Trust, including avoiding probate and controlling distribution--particularly to minors or financially irresponsible adult beneficiaries.
There's an old expression: "All dressed up but nowhere to go!" This phrase has been interpreted to mean being completely prepared for an event that fails to materialize. This is sometimes true with persons who do a Revocable or Living Trust but fail to fund it. They are prepared to avoid probate but this objective--avoiding probate--fails to materialize because assets are not in the Trust at that time of death.
When person establishing a Trust (soemtimes called a "Settlor") does not take the steps necessary to fund the Trust, in most instances a probate will be necessary in order to allow the transfer or liquidation of those assets. This would apply to most assets which are titled only in the Settlor's name and which do not have a beneficiary or a POD designation.
Having a Living Trust has a number of advantages. A person can set up the Trust so that their assets can by-pass probate. This saves on time and expense in the distribution of the person's assets. In addition, by not going through probate, the distribution is private and not subjected to public disclosure.
Many times clients who have a Living Trust ask whether they also should also have a Last Will & Testament. After all, doesn't the Trust do essentially everything without needing the Will? Most experienced estate planning lawyers would agree that the answer is a resounding "yes." Even though you have a Trust, you should still have a Will--a special kind of Will often referred to as a "Pour-Over Will."
When a person establishes a Living or Revocable Trust, it is necessary to transfer certain assets into the Trust. Estate attorneys often call this "funding the Trust." Assets such as real estate, brokerage accounts, stocks, etc. can be transferred into the name of the Trust. When it comes to funding, clients often ask, should I title my vehicle(s) in the Trust?
Estate planning attorneys often recommend that you transfer your assets into a Living Trust (also called a Revocable Trust). This process is sometimes called "funding" the Trust. By transferring assets into the Trust before death, you can avoid--or at least minimize--probate.
When clients execute a Living or Revocable Trust, one of the first things about which their estate attorney should advise them is that their assets should be transferred into their Trust. This process is often called "funding" the Trust. Having a Trust without funding it is like having a vehicle with no gasoline...it won't get you very far!
When a person establishes a Living Trust (also sometimes called a "Revocable Trust" or an "Inter Vivos Trust"), they must "fund" the Trust in order to avoid probate.
If the Settlor does not take the steps necessary to fund a Living Trust, in most instances a probate will be necessary in order to allow the transfer or liquidation of the Settlor's assets. This would apply to most assets which are titled only in the Settlor's name and which do not have a beneficiary or a POD designation.