Within the past 10 years, the Living Trust has replaced the Will as the best way to care for you and your loved ones because it can avoid the fees, cost, and stress of court intervention in the event of mental incapacity or death. Properly funded, a living trust can help you keep legal control in your family or with persons you trust and avoid having a judge – an unknown third person – make decisions about your personal affairs.
A living trust is simply detailed, legally binding instructions to care for you and your family. There are three key players in a trust. First, the Trustmaker or grantor; this is the person who makes the trust. Second, the Trustee, whose job is to follow the instructions of the trust exactly and to the spirit of the trust. The third role are the Beneficiaries. The Trustee’s fiduciary duties run like a laser beam to the beneficiaries: every penny of the Trust must be used in the best interests of the beneficiaries.
Initially, you can act in all three roles in your living trust: You can be the trustmaker, trustee and beneficiary. Your spouse, children, or other loved ones can also be beneficiaries.
Your living trust is revocable – you can change your trust instructions anytime you wish. There is only one person in the world who can change your instructions: you. In the event of your temporary or permanent mental incapacity, or upon death, the trust locks in and becomes irrevocable so that no one else can change it.
Note: To achieve the objectives noted here, your trust must be properly drafted by an experienced Miami trust attorney and funded by transferring your assets to the trust. Funding of the trust is essential to achieving the trust purpose. Your key assets must be titled in the name of the trust or flow into the trust because the trust is the beneficiary of your account. If you have a living trust, and you have not reviewed the trust funding within the past several years with your attorney, it is likely time to do so.
For more detailed information see our paper: Understanding Living Trusts For Florida Residents.
Take-Away Points
- Every person, whether you have $100,000 or $1 million, should likely have a living trust rather than a will. A will must usually go through the costly, bureaucratic court system known as probate. A trust, properly funded, can avoid probate.
- A living trust is important to keep legal control in the family – and avoid court intervention in the form of guardianship or probate.
- A living trust provides detailed instructions to help insure that your hard earned money goes to your children or other loved ones – and not to their spouses, or creditors. Just as important, your trust instructions can help insure that your children receive a first-rate college education to help them compete in our new global economy.