Here are a Few Good Tips About Living Trusts for People of All Ages

Many people still have the wrong impression that living trusts are only for high-wealth people. While it is true that persons with large estates have added tax benefits, the general premise that living trusts should only be used by persons with big estates is wrong.

The revocable living trust is a useful and popular estate planning vehicle for persons with more or less than the federal estate tax floor amount representing the amount of assets required before federal estate taxes are due.

A revocable living trust offers a number of advantages. The first advantage is the large degree of flexibility that is available. A living trust is a trust created by a person called a "Grantor" during that person's lifetime that can be revoked, canceled or amended by its creator at any time. If the trust originally provides for money to go to Nephew Joe and Nephew Joe goes out of favor, the trust can be amended to delete him.

In many trusts, the Grantor is the trust's initial Trustee as well as the lifetime Beneficiary, the person receiving the income and principal (the "benefits") of the trust. The Successor Trustee who takes control of the trust and its assets at the Grantor's death can be a spouse, child or bank trust department.

It is the Successor Trustee's job to follow the terms of the written trust document upon the grantor's death; the trust will specify if the trust is to terminate and distribute the assets to named beneficiaries, or it is to continue for the benefit of successor beneficiaries.

By utilizing a trust, a person avoids dying "intestate", a legal term meaning that the Florida State Law dictates who gets your property upon your demise.

The well-known benefit of a trust is the avoidance of the court administration of estates known as "Probate," and the cost, publicity and delays associated with probate. A living trust does not involve court administration and related fees. In contrast, probating a will involves court filing fees, legal and personal representative's fees.

Besides being expensive, probate is time-consuming. Quicker distribution of assets to beneficiaries can be achieved with a living trust.

Probate is a court-supervised distribution of an estate's assets and is not a private matter as the Probate Court is paid for with taxpayers dollars, so most of the records are public records.

A person's beneficiaries, heirs and creditors are public information, as well as the approximate type and size of your assets. Many people prefer that such private matters remain secret.

Since a living trust operates outside of the Probate Court as a private contract, these matters avoid the public forum where anyone can learn about them especially people who prey on survivors in times of distress.

Since a will does not become effective until death, it cannot protect an individual from incapacity. 1.5 million Americans have been declared legally incompetent to manage their own affairs, so avoidance of a guardianship in the event of incapacity is a key advantage to a living trust.

The trust should provide that at the Grantor's incapacity, the Successor Trustee immediately takes over the management of the Trust. This will avoid a public guardianship hearing and will avoid a gap in the Grantor's financial affairs. The Successor Trustee can promptly manage the Grantor's finances by watching the investments and paying legitimate bills.

A revocable living trust has many potential advantages. It is often used in conjunction with other estate planning tools such as powers of attorney, pour-over wills and living wills. A Power of Attorney names one individual to sign legal documents for you. A pour-over will places assets in your trust at death which were intentionally or unintentionally left out of your trust during your lifetime.

A living will expresses a person's desire to die without the imposition of life-prolonging procedures. Together, these documents form a good estate plan to handle pre-and post-death matters; health and financial affairs during lifetime are efficiently handled and assets are passed to beneficiaries at death in the quickest and least expensive manner.

Cynthia Rignanese is a Polk County lawyer; since 1991, she has focused on real estate planning, business law and estate planning. For more information, http://www.RignaneseLaw.com and 863-294-1114.