WHAT IS A TRUST?
In general, a trust is a place where people (“grantors” or “settlors”) place assets to be managed by trustees. There are many kinds of trusts and most, but not all, are created by a written document and the transfer of assets to the trust. Some trusts are permanent and cannot be changed (irrevocable trusts). Some arise from a will after death (testamentary trusts). A living trust is revocable, changeable by the grantor during his or her life, and then managed by a named trustee after the grantor has passed away. While the grantor lives, he or she can add assets to the trust, take assets away from the trust, change the beneficiaries of the trust, change the trustee, or change any provision of the trust. A living trust is a private document and, unless challenged, is not presented to any court.
A living trust provides a great deal of flexibility and assistance in managing assets. The grantor can create the trust, provide for his or her lifetime support from the trust, provide support for others (especially disabled children) during the grantor’s lifetime and/or after the grantor’s death, provide for distribution of assets after the grantor’s death, and choose the trustee(s). If a co-trustee is named or added, that person can step in at any time to assist the grantor in managing most or all financial affairs.
The Florida Trust Code was enacted in 2007 to codify and, in some ways, strengthen the law governing trusts. Trustees must fulfill specific duties and act for the benefit of the trust beneficiaries (including the grantor). They must keep records and account to the beneficiaries for what they do. The actions of a trustee can be challenged in court, but it is up to the beneficiaries to bring the challenge. A court does not automatically review trust activities as it does a will.
A living trust is one of the most commonly used devices to “avoid probate,” in other words, to provide for the disposition of assets after death, without reference to a will, and without court involvement.
Take time to learn more about Trust Administration, Wills, Estate Administration and Land Trusts continue to explore our site for specific information on each subject. We also have Frequently Asked Question page to answer some of the common questions. Obviously if you don’t find your answer here please feel free to contact us or set up an appointment to get all of your questions answered by the area’s best Life Planning Attorney.