Is a Living Trust Right for Us?

Understanding a Living Trust with Bill O’Leary

Key Decisions a Trust Allows You to Make

1. Who gets your stuff
2. What they get
3. When they get your stuff, and
4. How they get it

State Intervention in Absence of a Trust

If you do not legally answer these questions yourself, then the state of Florida will supply answers for you. Likely, the state’s decisions for managing your estate will not match your own choices.

Forbes’ article, “What Is A Living Trust? Definition, Pros & Cons,” explains everything you need to know about living trusts to determine if one is right for you.

The Basics of a Living Trust

The grantor (or owner of the assets) transfers property ownership to the trust. They will name a trustee to manage the trust property. The grantor can choose to be the trustee, retaining control of trust property.  The grantor also names beneficiaries of the trust. These individuals are the individuals (or other entities) who benefit from the trust.

Roles and Responsibilities in a Trust

O’Leary explains in his video, that for a married couple with a trust:

“They wear two hats while they’re living:

1. They are the trustees of the trust and in complete control of their assets
2. They are also the beneficiaries of the trust receiving the benefits from the trust.”

Importance of Asset Alignment

Note that after you create the trust document, you must transfer the property titles and your assets to it.  O’Leary describes this process as asset alignment. He argues that asset alignment, or transferring property ownership to the trust, “is a very critical step in the process of putting a trust together that can overlooked by clients or their attorneys.”

Flexibility of a Living Trust

The trust becomes effective as soon as you create it. However, because it’s a living or revocable trust, you have the right to cancel it or make changes to it any time you want to.

When creating the trust, the grantor can also designate a “successor trustee.” The successor trustee will manage the trust property if and when the primary trustee becomes incapacitated or passes away. So in the case of a married couple, once they both pass away, the successor trustee would step in to manage their trust assets.

Benefits of Trust for Beneficiaries

In addition, the grantor designates beneficiaries, often your children or other loved ones, who will inherit the property held within the trust after the grantor’s death. A significant benefit of a trust is that the assets held within the trust transfer to the beneficiaries without going through probate. In addition, the trust can protect the inheritance from issues that may arise in the lives of the beneficiaries including divorce or bankruptcies. Read more about beneficiary designations in our article,  How to Use Joint Accounts and Beneficiary Designations

Steps to Create a Living Trust

Creating a living trust entails drafting a formal legal document that:

• Establishes the trust
• Names the trustee (and successor trustee)
• Names the beneficiaries; and
• States when and how trust property will be transferred to beneficiaries.

Exploring Other Estate Planning Options

A living trust is a powerful legal tool. However, there are other estate planning documents that you may need.  If you would like to know more about what a living trust is and how it can help you achieve your wishes, schedule a discovery call with Team Legacy.

Experienced Jacksonville Trust Attorney Bill O’Leary can help you with creating a living trust, as well as developing a comprehensive plan to protect you in case of incapacity and to provide for your loved ones after you’re gone.

Reference: Forbes (May 12, 2023) “What Is A Living Trust? Definition, Pros & Cons”