The following Frequently Asked Questions about revocable living trusts will assist you in understanding the advantages, and disadvantages, of using a revocable living trust based estate plan.
3. ARE ALL ASSETS SUBJECT TO PROBATE?
4. HOW DOES A REVOCABLE TRUST AVOID PROBATE?
5. HOW DO I KNOW IF MY ASSETS ARE PROPERLY TITLED TO MY REVOCABLE TRUST?
6. CAN THE TRUST HOLD TITLE TO MY
7. DO I BENEFIT BY AVOIDING PROBATE?
8. HOW ARE CREDITORS SATISFIED?
9. DOES THE TRUST PROVIDE PROTECTION FROM CREDITOR CLAIMS?
10. DOES THE TRUST PROVIDE PROTECTION FROM THE ELECTIVE SHARE?
11. WHO PAYS FEDERAL INCOME TAX ON TRUST INCOME?
12. DOES A REVOCABLE TRUST SAVE ESTATE TAXES?
13. WHAT ARE THE TRUSTEE'S RESPONSIBILITIES?
14. WHO MAY ACT AS TRUSTEE OR SUCCESSOR TRUSTEE?
15. HOW DO I KNOW WHAT I NEED?
During your lifetime the trustee invests and manages the trust property. Most trust agreements allow the grantor to withdraw money or assets from the trust at any time, and in any amount. If you become incapacitated, the trustee is authorized to continue to manage your trust assets, pay your bills, and make investment decisions. This may avoid the need for a court-appointed guardian of your property. This is one of the advantages of a revocable trust.
Upon your death, the trustee (or your successor if you were the initial trustee) is responsible for paying all claims and taxes, and then distributing the assets to your beneficiaries as described in the trust agreement. The trustee’s responsibilities at your death are discussed below.
Your assets, such as bank accounts, real estate and investments, must be formally transferred to the trust before your death to get the maximum benefit from the trust. This process is called “funding” the trust and requires changing the ownership of the assets to the trust. Assets that are not properly transferred to the trust may be subject to probate. However, certain assets should not be transferred to a trust because income tax problems may result. You should consult with your attorney, tax advisor and investment advisor to determine if your assets are appropriate for trust ownership. (Return to Top)
2. WHAT IS PROBATE?
Probate is the court-supervised administration of a decedent’s estate. It is a process created by state law to transfer assets from the decedent’s name to his or her beneficiaries. A personal representative is appointed to handle the estate administration. The probate process ensures that creditors, taxes and expenses are paid before distribution of the estate to the beneficiaries. The personal representative is accountable to the court as well as the estate beneficiaries for his or her actions during the administration. For probate estates having less than $75,000 of non-exempt assets,
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Serving as trustee is no simple task. While very important, the prudent investment of trust assets is not a trustee’s only responsibility. Your trustee’s exact powers and duties will depend on the instructions in your trust agreement. But, in general, your trustee will:
Your trustee may have broad powers or very limited powers. In either case, your trustee is a fiduciary and must follow a strict standard of care when performing trust functions. (Return to Top)
14. WHO MAY ACT AS TRUSTEE OR SUCCESSOR TRUSTEE?
The choice of a trustee is extremely important, and may have tax consequences. You can name almost anyone as your trustee. Unlike the appointment of a personal representative of a probate estate, a trustee does not have to live in
15. HOW DO I KNOW WHAT I NEED?
This material represents general legal information. Since the law is continually changing, some provisions may be out of date. It is always best to consult an experienced Florida probate lawyer or attorney at The Gainesville Probate Lawyer, about your legal rights and responsibilities regarding your particular case.
Legal Notice and Disclaimer. The materials within this website are for informational purposes only. This information does not constitute legal advice and should not be relied upon by any individual. Communication of this information is not intended to create, and receipt does not constitute, the establishment of an attorney-client relationship. Internet users and readers should not act upon this information without first seeking professional legal counsel for your particular circumstances. The information on this website is provided only as general information which may or may not reflect the most current legal information.
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