How To Set Up a Living Trust in Florida? A Quick Guide

Published June 24, 2024

Estate planning is a critical step in guaranteeing that your assets are managed and allocated according to your wishes. One of the most effective tools for achieving this is a living trust, particularly in the estate of Florida.

In this article, we’ll enlighten you on everything you need to know about it. From definition, benefits, limitations, and how to set up one for yourself. Let’s start.

What Is a Living Trust?

A living trust, also known as an “inter vivos” trust, is one you create while you’re alive. The beneficiaries you name in it receive the trust property when you die. You could instead employ a will, but wills must go through probate. Probate is the court process that oversees transferring your properties to your beneficiaries.

Many seek to craft a revocable living trust for their estate plan. These trusts can be altered or canceled at any time. Typically, you’ll appoint yourself as the trustee of your trust. It communicates that while you are alive, you retain the trust and its property management.

In your trust account, you will also name a “successor trustee” to take over and facilitate the trust after you die. If you craft a shared living trust, as is often done by spouses, your successor trustee would assume control after both spouses have passed.

In contrast, irrevocable trusts can’t be canceled or altered after signing them. These trusts can be valuable tools for specific goals, such as reducing taxes. However, they require giving up ownership and control of the property.

Do I Need a Living Trust in Florida?

You are setting up a living trust to move your property to your loved ones after your passing, which can save them time, hassle, and money.

Property left through a will instead of a living trust might be tied up for months or years in probate court. It could involve court costs and lawyers’ fees. Alternatively, property left through a trust can be immediately distributed to your beneficiaries. It is also often without the need for an attorney.

However, Florida is one of the states that has adapted the Uniform Probate Code, a modern law that streamlines the probate process.

Florida has simplified probate processes for small estates, too.

• Your estate can be eligible for a shortcut called “disposition without administration.” This is supposed to mean there is no real estate in the estate. The property is clear from creditors’ claims, except for amounts needed to pay funeral expenses and two months’ worth of costs of a last illness.
• Your estate can meet the requirement for a shortcut called “summary administration” if the entire estate’s value, minus property exempt from creditors’ claims, doesn’t exceed $75,000 also if it has been two years since the deceased individual passed away.

Florida’s estate process is more straightforward now than ever. You might not need to worry about crafting a living trust just to avoid probate. The same goes if your estate is eligible for a simplified version of probate.

If I Craft a Living Trust in Florida, Do I Still Need a Will?

You will still require a will. While the point of a living trust is to avoid needing one, you should still write one. It is for one or both of the following reasons:

1. Designating a guardian for minor children

You can’t employ a trust to name a guardian for your minor children. For this reason, if you have minor children, you should craft a will that appoints the guardian.

2. Accounting for property that you haven’t moved to your trust.

This happens all the time. It’s a common mistake for people to create a trust and forget to transfer property to the trust formally. For one, they never modify the deed on their house. Also, people buy or inherit property after they’ve crafted their trust and forget or don’t know how to take ownership as the trustee of their trust.

Can a Living Trust Reduce Estate Tax in Florida?

A living trust can be a crucial tool in estate planning. Yet, it doesn’t directly reduce estate taxes. Instead, it assists with other aspects of estate management, such as avoiding probate. This can save time and reduce costs connected with the probate process.

Florida does not have a state estate tax, so the state does not impose taxes beyond the federal government’s requirements.

How To Set Up a Living Trust in Florida

1. Choose the type of trust

Decide whether you need an individual or joint trust. An individual trust is for one person. A joint trust is shared between spouses or partners.

2. Take an inventory of your assets

Make a comprehensive list of all property you want to include in the trust. This can include real estate, bank accounts, investments, and personal items.

3. Select a trustee

Choose a trustee to manage the trust. You can serve as the trustee during your lifetime. Yet, you must appoint a successor trustee who will take over after your passing or if you become incapacitated.

4. Designate beneficiaries

Appoint your beneficiaries. These are those that will receive the assets from the trust. You can name individuals, organizations, or a combination of both.

5. Draft the trust document

Create the trust document outlining your personal terms and conditions. It is advisable to have an attorney draft this account. Doing so will guarantee that it meets legal requirements. Also, that it accurately reflect your wishes.

6. Sign the trust document

The trust document must be signed by you, the grantor and may need to be notarized.

7. Transfer assets into the trust

Transfer ownership of your assets into your trust. This step is vital. The trust only controls assets that are properly titled in its name. For instance, you’ll need to update deeds for real estates and alter titles for bank accounts and other financial assets.

8. Store your documents safely

Keep the trust document and any related records in a safe place. Inform your successor trustee where these accounts are located.