Living Trust – What is it?

Living Trust – What is it?

 

A living trust (also referred to as a revocable living trust) is a written agreement created for the simple purpose of holding ownership of assets outside of your probatable estate during your lifetime, and then distributing these assets to named beneficiaries after your death.

 

Specifically, you as the creator of the living trust (known as the “settlor”) transfer property from your personal ownership to a trust that you have created. You then name yourself as the initial trustee of that trust.

 

The result is that while legal ownership of the trust property changes from you to the trust, you (as initial trustee) continue to maintain control over your property and can continue to enjoy it in the same way as you did prior to transferring it to the trust. When you die, a person appointed by you and known as a “successor trustee” steps in, takes control of the trust, and transfers the trust assets to the people named as beneficiaries under the trust agreement.

 

Living trusts are revocable, meaning that you as the grantor reserve the right to revoke or terminate the trust and resume personal ownership of the trust property at any time. In addition, you maintain discretionary rights to add to or withdraw assets from the trust property, to change the terms of the trust, and even to make it irrevocable at some time in the future.

Advantages of Living Trusts

There are a number of advantages to using living trusts, including but not limited to:

 

  1. A living trust allows assets to avoid probate – After you create a living trust, you must fund it by transferring title to certain assets from your name to the name of the trust. For example, from Bob Smith to Bob Smith’s trust. Assets owned by the trust may skip probate and be transferred directly to your heirs after your death. This will facilitate a faster transfer and allow your heirs to begin managing those assets sooner. You will also be saving your heirs a considerable amount of money in court costs and legal fees.

 

  1. Privacy – Probate is a public process and your assets and everything associated with them will be a part of the public record. On the other hand, a living trust is a private contract between the grantor and the trustee. As such, there is no public filing requirement and the terms of the trust, its assets, and beneficiaries can remain confidential.

 

  1. A living trust helps you plan for incapacity – When you create a living trust you can name a successor trustee, who will take over the management of the trust assets if you are unable to continue as trustee dues to incapacity. This allows you to ensure that a person designated by you will protect and manage the trust assets if something were to happen to you.

 

  1. Flexibility – There is a lot you can do with a living trust to achieve your estate planning goals. Furthermore, you can change the trustee and beneficiaries of a living trust, add or withdraw assets, modify the terms, or revoke a living trust whenever you want.

Disadvantages of Living Trusts

There are a number of disadvantages to using living trusts. These include the following:

 

  1. Potential for failure to properly fund the living trust – One of the biggest problems associated with living trusts is the failure to properly transfer assets into the trust. When assets are not properly transferred to the trust, they remain part of your probatable estate and are not subject to the terms of your trust.

 

  1. Lack of court supervision – One of the benefits of the probate system is that the court often watches over the distribution of your estate, and in doing so protects the interests of your beneficiaries. However, no such supervision occurs with a living trust as the responsibility for effecting and overseeing the distribution of your trust assets rests solely with your designated successor trustee. This can be disadvantageous in certain circumstances.

 

  1. Limited financial savings for smaller estates – The real determination as to whether a living trust will save you money depends on the amount of probate fees that would have been paid had the trust assets gone through probate, rather than passing through your living trust. If the estate has a small monetary value, you may find that the probate fees are quite low in relation to the costs of establishing and maintaining a living trust.

 

  1. Limited asset protection – A living trust does not provide the same level of asset protection as some other estate planning tools (i.e. irrevocable trusts). The assets in the trust can still count for the purpose of determining if you qualify for Medicaid to cover nursing home care. Furthermore, a living trust won’t shield your assets from being counted for estate tax purposes.

Do I Need A Living Trust?

Not everyone needs a living trust. As a general rule of thumb, you might not need a living trust if you are young and healthy, can more easily transfer your assets (or some of them) by other probate avoidance methods, or when you do not own any (or very little) property of value. You should consider your own situation carefully before making any decision to create a living trust.

 

An experienced estate planning attorney can help you to determine if a living trust is the best option for you. For more information about living trusts in Florida, contact the Florida estate planning attorneys at Lynchard & Seely, Pllc at 1-850-936-9385 or visit our contact page to book an appointment.

 

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Lynchard & Seely – COVID-19 Update

We want to update you on the steps we are taking to ensure we can continue to meet your legal needs in a secure and reliable manner. This year marks our firm’s 20th year in Navarre, and our team remains fully operational and here to support you and our community...

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Florida Revocable Trust – Who Should Have One?

Florida Revocable Trust – Who Should Have One?

 

A revocable living trust is simply a trust that you create for yourself, for your own benefit and the benefit of those you care about. You can think of a revocable living trust as a business that you set up to manage your affairs when you become incapacitated or die. However, unlike a corporation or an LLC, there are no filing requirements with the secretary of state and there are no publicly accessible records of a revocable living trust.

In order to take full advantage of a revocable living trust, you need to have assets that can be owned by the trust and then you must transfer ownership of those assets to the trust or make the trust the beneficiary of any pay-on-death beneficiary designations.

 

Is a Revocable Living Trust Right For You?

 

  • Do you have assets north of $250,000?
  • Do you have assets that require active management?
  • Do you have brokerage accounts, real estate, or rental property?
  • Do you have multiple pieces of real property?
  • Do you have a potential problem heir, such as an heir with divorce problems, creditor problems, etc.?
  • Do you have an heir who may object to what you want done with your estate?
  • Have you remarried?
  • Do you have a particular type of nursing home that you would like to be placed in? Or a particular type that you do not want to be placed in?
  • Do you want to take advantage of certain tax planning strategies?

These are all great reasons to consider a revocable living trust, and if you answered yes to one or more of the questions above, you should seriously consider having a revocable living trust as the primary vehicle for your estate plan.

  

What Will Revocable Living Trust Do for You?

First of all, assets that you place in your revocable living trust will avoid both:

While there are caveats to the foregoing statement, guardianship is when the court imposes certain limitations and restrictions on your estate in order to allow someone else to manage it when you become incapacitated. Holding assets in a revocable living trust will allow you to easily have whomever you select as the trustee of your trust to manage your assets when you are unable to do so yourself.

 

Upon your death, the assets in your revocable trust will pass pursuant to the terms of your trust and will never fall under the jurisdiction of the probate court. This is important because if anyone wants to challenge what you have directed your trust to do with your assets, it will be much harder for them to do so.

 

A revocable living trust can provide other great benefits as well. For instance, you can give the trustee specific directions on how to meet your needs and the needs of those who depend on you if you become Incapacitated.

 

A revocable living trust may also be the foundational document that opens the door to additional estate planning strategies, such as the use of a limited liability company and other more complex estate planning tools. Usually, your revocable living trust will still be the key to how the assets held by these entities will be managed if something happens to you.

 

Furthermore, a revocable living trust allows you to build in other provisions that will ensure that your wishes are carried out and that will discourage anyone who is unhappy with how your estate is being managed or disposed of from challenging the terms of the trust.

 

All of these kinds of things can be put into a revocable living trust and, with the right assets and management team, you will be able to express your wishes and have them met through the trust.

 

Contact Lynchard & Seely, PLLC:

Florida Estate Planning Attorneys

 If you are thinking about using a revocable living trust to manage your estate, be careful. There are many different types of revocable living trusts, but not all are created equal. Determining what type of revocable living trust you will need to accomplish your goals is where a qualified attorney can help.

 

An experienced estate planning attorney can sit down with you, learn what goals you have for you and your family and what your estate consists of and then suggest ways to accomplish these goals effectively and efficiently. Contact Lynchard & Seely, PLLC,  either here online or by calling 1-850-936-9385, to arrange a consultation with one of our expert Florida estate planning attorneys who can provide you with answers to all of your questions.

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Lynchard & Seely – COVID-19 Update

We want to update you on the steps we are taking to ensure we can continue to meet your legal needs in a secure and reliable manner. This year marks our firm’s 20th year in Navarre, and our team remains fully operational and here to support you and our community...

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4 Key Elements of a Rock-Solid Estate Plan (Plus a Bonus)

4 Key Elements of a Rock-Solid Estate Plan (Plus a Bonus)

 

 

Meeting with an estate planning attorney in Florida to help you arrange for your final wishes is something that most people have on their ‘must-do‘ list. It’s one of those things that isn’t very pleasant to discuss or consider. Some even wonder if they need to go through the process.

 

However, the idea of someone else making decisions based upon their best interests without your input is even more uncomfortable than inaction.

 

That thought could become a reality without careful planning beforehand. When you have children, property, assets, and financial dealings, the need becomes even more significant. Commit to documenting how you want your affairs handled while you still can.

 

Think of it this way: an estate plan is yours to make, but the peace of mind is actually for your family. Locating accounts, gathering documents, and carrying out your last wishes is too much for your loved ones.

 

Having the documentation in place means that all they have to do is execute your requests and celebrate the life you lived.

 

Major Components of an Estate Plan

Most people think of an estate plan as a will or trust. While these documents are fundamental components of a rock-solid estate plan, there are other directives you can put into place to manage your end-of-life affairs and beyond. A basic understanding of the options available can make your efforts more productive when meeting with a probate attorney in Florida.

Last Will and Testament

1. Last Will and Testament: A last will and testament is the document in place for carrying out estate administration requests. While it isn’t as comprehensive as a trust, it still holds value from a legal standpoint.

 

You can designate how you want the following to be treated in your will:

· burial or cremation

· guardianship for children

· naming the personal representative

· division of assets among heirs

Upon death, your estate goes through a Florida probate court to finalize the estate.

 

A judge will review your will, hear contested claims, and administer all transfer of property. It is a process that families dread which makes utilizing a living trust an attractive option.

 

Revocable Living Trust

2. Revocable Living Trust: The easiest way to understand how a revocable living trust works is to think of it as a corporation for your entire estate. This analogy may seem intimidating at first; however, it’s not as complicated or expensive as it sounds.

In fact, it’s a great way to direct assets and execute final wishes down to the last detail.

A revocable living trust is a separate entity established that ‘owns’ your property when you transfer real and personal property into it over the course of your lifetime.

 

You are still in complete control of the assets you transferred into it as you are the named as the trustee. The document can be revoked at any time if the need arises. You are in the driver’s seat.

 

A trust does not need to go through probate as long as the trust owns all of your assets. This strategy requires a level of diligence and organization that a probate lawyer in Florida can accomplish. Assets you can place into a trust include vehicles, real estate, money, and investment accounts.

 

Aside from avoiding probate, a living trust keeps your estate details private since it does not become part of public record.

 

Durable Power of Attorney

3. Durable Power of Attorney: A Durable Power of Attorney gives another party, such as your spouse, the ability to act on your behalf in making medical decisions, working with banks and government agencies, or even discussing contracts you hold.

The main idea is that if something should happen to you, whether through disability, someone else will be able to manage your personal effects. The absence of a power of attorney means that your loved ones may have to go to court to receive guardianship authority.

Advanced Healthcare Directives

4. Advanced Healthcare Directives

An advanced healthcare directive is the ‘holy grail’ of documents that pertain to making major medical decisions when you are unable to do so. Outside of the scope of a power of attorney, the advanced healthcare directive allows you to specifically direct how you want to certain aspects of your physical body such as:

· resuscitation directives pertaining to life support

· specific requests for burial or cremation

· organ donation in whole or in part

 

An advanced healthcare directive gives you the power to name the person who can make these decisions for you, if you can’t. It’s comforting to know that medical decisions will be made by someone you trust and in a way you would have wanted.

Bonus Document:

Business Buy/Sell Agreements

For Small Business Owners: While available in custom formats, the Buy/Sell agreement provides a means for your heirs, loved ones, business partners, and other vested persons to purchase your business in the event of your death. It often contains specific instructions, amounts, and funding sources, such as insurance, from where the purchase originated.

 

This document can be part of your business’ succession planning effort and may already be in place according to your operating agreement.

 

You may need all of these documents or some combination of them. Discussing your needs with an estate planning attorney in Florida can help you sort through some tough decisions while putting together a plan that meets your every need.

 

Our team at Lynchard & Seely, PLLC has been serving families in Santa Rosa County, FL and surrounding areas with all of their estate planning needs. You can request a free consultation by calling 850-936-9385 or completing our online contact form.

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Lynchard & Seely – COVID-19 Update

We want to update you on the steps we are taking to ensure we can continue to meet your legal needs in a secure and reliable manner. This year marks our firm’s 20th year in Navarre, and our team remains fully operational and here to support you and our community...

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Estate Planning – Do I Need It?

Estate Planning – Do I Need It?

Estate Planning – Do I Need It?

I think everybody worries what happens to their stuff when they pass away or what happens if you become incapacitated. These are extremely important questions and valid worries. It might surprise you but it is estimated that approximately 70% of people do not have an estate plan in place.

The purpose of this blog post is to begin to introduce to you what estate planning is. By the end of this blog post you should at least know where to begin or have a direction in which to head. Alright, let’s go.

As a preliminary statement, there is no exact definition of “estate planning.” Essentially, I define “estate planning” as the mechanisms or the systems you have in place to deal with your life or stuff in the instance of incapacitation or death.

For the most part, these systems or mechanisms can come in many forms, but generally fall under two main categories:

 

Category 1 – While You Are Alive

Category 2 – When You are Dead

Category 1 – While You Are Alive

 

You have to ask yourself the following questions: What happens if I get in a car accident and have brain damage? What happens if I have a stroke?

What happens medically is a topic for a different blog, but the legal and financial aspects of these questions are a main purpose of this blog and my legal practice. You need to be thinking about what systems or mechanisms you should have in place while you’re alive to address the questions above.

The short answer is to provide other trusted people with the authority or power to handle your affairs and make decisions when you can’t.

My favorite basic estate planning document is the Durable Power of Attorney, which covers legal and financial matters. This document has by far saved my clients time and money more times than any other estate planning mechanism.

I will talk about the Durable Power of Attorney, its uses, the legal requirements, and the pros and cons, in later blog posts, but for now you need to be thinking about putting one of these documents in place and fast.

While the Durable Power of Attorney handles legal and financial matters, the Designation of Health Care Surrogate handles medical. This document is also one of my favorite estate planning documents. This document authorizes individuals, other trusted people, to make medical decisions if you’re unable to, including the ultimate decision of whether to “pull the plug.”

Again, I will get into the Designation of Health Care Surrogate, its uses, the legal requirements, and the pros and cons, in later blog posts, however, for now, you need to be thinking about putting one of these documents place and fast.

 

Category 2 – When You Are Dead

 

You have to ask yourself the following questions: What happens too much stuff when I pass away? You saw the cause of death statistics above right? Including the stroke statistics?

Again, I will not be getting into the multitude of ways that a person can die. However, the legal and financial aspects of this question is a main purpose of this blog and my legal practice. As with Category 1 above, you need to be thinking about what systems or mechanisms you should have in place when you pass away to address the questions above.

The short answer is, generally, a Last Will and Testament or Living Trust. The purpose of these documents is to have a written instrument in place that dictates the handling and the distribution of your estate.

While this answer is very simplistic and there are multitude of other issues to address, either one of these documents can act and address the question of what happens to your stuff when you pass away. Much like the durable power of attorney and the designation of health care surrogate, the Last Will and Testament or Living Trust are my favorite basic estate planning tools to address what happens when you die.

 

Conclusion:

I hope this blog post has begun to introduce you to estate planning. I also hope that it’s giving you a little bit of direction and perhaps the basic documents you need put in place to address the questions that all of us have.

To summarize, I strongly suggest you look into putting following documents in place right now:

  1. Durable Power of Attorney,
  2. Designation of Health Care Surrogate,
  3. Last Will and Testament, and
  4. Living Trust.

Remember, you never know what or when something may happen.

I want to thank you for taking the time stop by our website and read our blog. If you’d like to know more please be sure to subscribe below, and if you like the content we provide please consider sharing this on Facebook, Twitter, or any other social media.

As always, I look forward to your comments and question below.

Thanks again and I’ll talk to you soon,

Sean J. Seely

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Lynchard & Seely – COVID-19 Update

We want to update you on the steps we are taking to ensure we can continue to meet your legal needs in a secure and reliable manner. This year marks our firm’s 20th year in Navarre, and our team remains fully operational and here to support you and our community...

read more

Want Help With Your Estate Plan?

Click Below to Schedule a FREE Initial Consultation!

 

 

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Navarre, Florida Estate Planning Attorneys You Can Trust

One of our main areas of practice is estate planning and in Escambia, Santa Rosa, and Okaloosa and throughout Florida. We handle is Wills, Trusts, and Estates. Whether you want to protect your assets for your children, need help with a guardianship, or just need a Florida deed to trust, you can take comfort in knowing that our experienced estate planning lawyers, based in Navarre, Florida, are always looking out for your interests.

Our areas of emphasis include:

  • Estate Planning – We provide last wills and testaments, revocable and irrevocable trusts, durable powers of attorneys, advanced directives / designation of healthcare surrogates, living wills, and other important documents that will help preserve your assets and reach your goals. We can also assist with advanced estate planning such as irrevocable trusts, irrevocable life insurance trusts, and tax planning.
  • Guardianship Administration – We can help in the unfortunate circumstances where a court authorization is required to act on behalf of an incapacitated person, including cases of the elderly/infirm, mentally ill, and minors.

When you need a Pensacola, Cantonment, Pace, Milton, Gulf Breeze, Navarre, Fort Walton, or Crestview Estate Planning Lawyer, Call US!

We take great pride in providing personalized service and guidance to all of our estate planning clients. Whether your goals are a simple estate plan or more advanced wealth preservation techniques, we are happy to help. It is what we do! You can rest assured that we strive to provide the highest quality legal service of any estate planning attorneys in Florida.

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