Florida Inter Vivos Revocable Trusts

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A revocable trust is a popular and very useful estate planning device. One obvious attribute of a trust is that it will avoid ‘probate’ that is required of a will. This is not to say that that a trust avoids all of the costs of probate, but that the trusts can make the process much smoother if well planned. A trust can be revocable or irrevocable. “Revocable” means that the person who sets up the trust has reserved the right to amend or revoke the trust during his or her lifetime. “Irrevocable” means that the grantor of the trust gives up the right to alter, amend or revoke the trust.

A revocable living or “inter vivos” trust is one in which the grantor places all or certain of his or her assets directing that the trustee use the assets to provide for his or her needs during life. At death, the trust directs the distribution of the trust assets to certain named beneficiaries. The trust may also provide that the assets continue to be held in trust for the benefit of named beneficiaries for certain purposes and then distributed at a later time.

Most often, the grantor retains complete control of the assets while alive by naming himself or herself as the trustee of the trust, and then naming a successor trustee to take over when the grantor becomes incapacitated or dies.

In order for this estate planning method to work properly, the trust must be “funded” by the transfer of assets to the trustee, but there is no danger to the assets being in trust because the grantor has reserved control of the trust to amend or revoke the trust. The trust does not have to file a separate income tax return or maintain separate trust records prior to the death of the grantor.

Avoid Probate

A revocable "living trust" avoids probate’ the assets placed into trust while the grantor is alive do not pass under the Will, and therefore do not go through a costly and time consuming probate administration.

Creating Valid Florida Trusts

Trusts Must Be Signed and Witnessed Like a Will Florida

Florida statutes govern the validity and execution of trusts and provide a trust intended to work as a testamentary instrument must be signed and witnesses in the same manner as a will. The pertinent statutes are as follows:

736.0401 Methods of creating trust.
A trust may be created by:
(1) Transfer of property to another person as trustee during the settlor's lifetime or by will or other disposition taking effect on the settlor's death;

736.0402 Requirements for creation.

(1) A trust is created only if:
(a) The settlor has capacity to create a trust.
(b) The settlor indicates an intent to create the trust.
(c) The trust has a definite beneficiary or is:
1. A charitable trust;
2. A trust for the care of an animal, as provided in s. 736.0408; or
3. A trust for a noncharitable purpose, as provided in s. 736.0409.
(d) The trustee has duties to perform.
(e) The same person is not the sole trustee and sole beneficiary.
(2) A beneficiary is definite if the beneficiary can be ascertained now or in the future, subject to any applicable rule against perpetuities.
(3) A power of a trustee to select a beneficiary from an indefinite class is valid. If the power is not exercised within a reasonable time, the power fails and the property subject to the power passes to the persons who would have taken the property had the power not been conferred.

736.0403 Trusts created in other jurisdictions; formalities required for revocable trusts.

(1) A trust not created by will is validly created if the creation of the trust complies with the law of the jurisdiction in which the trust instrument was executed or the law of the jurisdiction in which, at the time of creation, the settlor was domiciled.
(2) Notwithstanding subsection (1):
(a) No trust or confidence of or in any messuages, lands, tenements, or hereditaments shall arise or result unless the trust complies with the provisions of s. 689.05.
(b) The testamentary aspects of a revocable trust, executed by a settlor who is a domiciliary of this state at the time of execution, are invalid unless the trust instrument is executed by the settlor with the formalities required for the execution of a will in this state. For purposes of this subsection, the term “testamentary aspects” means those provisions of the trust instrument that dispose of the trust property on or after the death of the settlor other than to the settlor's estate.

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