Dispelling Two Common Myths About Florida Revocable Trusts
Revocable living trusts are often used in Florida estate planning to help individuals pass their property on to family members (or other beneficiaries) outside of the normal probate process. When properly structured and administered, a revocable trust can help secure your family’s financial security even after you are gone. At the same time, revocable trusts have certain limits that need to be carefully understood.
With that in mind, here are two common myths you may hear about Florida revocable trusts–and why they are not true.
“A Revocable Trust Protects Your Assets from Creditors”
This is perhaps the most common misunderstanding regarding revocable trusts. People think that transferring their assets into such trusts provides instant protection from potential creditor claims. In fact, revocable trusts offer little if any such protection.
The key to a revocable trust is that it is revocable. When you create and fund a revocable trust, you can change its terms at any time. You can add or remove property to the trust as you see fit. And you can abolish the entire trust and reclaim all of the assets as your sole property. Consequently, Florida law generally does not make any distinction between property owned by you or by your revocable trust, at least during your lifetime. This means any creditor with a personal claim against you can go after assets in your revocable trust, just as they would any other property that you own.
If you are still looking to protect your assets from creditors, however, there are certain types of irrevocable trusts that may help you in achieving that goal. Keep in mind, such trusts typically require you to surrender control of any assets to the trustee.
“A Revocable Trust Means You Don’t Need a Will”
It is true that assets owned by a revocable trust do not pass under the will of the person who created the trust. Indeed, this is why revocable trusts are so popular. They allow individuals to keep certain assets out of probate.
But that does not mean you do not need a will in addition to a trust. For one thing, there are certain things you can only do with a will, such as appointing an executor for your estate or a guardian to care for your minor children. Additionally, no matter how well you structure and fund your revocable trust, there is always the possibility that you will still leave some assets out of the trust and in your probate estate.
What most people do in this situation is create what is known as a pour-over will. This is basically a regular will that leaves any probate assets to the revocable trust. In that sense, the estate “pours over” any leftover assets to the trust.
Contact a Pompano Beach Estate and Trust Litigation Lawyer Today
Having a will and a revocable trust is no guarantee that legal disputes cannot still arise. A qualified Pompano Beach estate and trust litigation attorney can advise you in such matters. Contact the offices of Mark R. Manceri, P.A., today to schedule a consultation.
