Some basic information about Florida trusts
Most Florida residents know that a will is traditionally the central component of a good estate plan because it spells out the testator’s specific wishes regarding their assets. And while a will can specify details about the distribution of property, sometimes a better option is to create a trust in order to properly manage the assets both during the testator’s life and after death. A well drafted trust can complement or substitute for a will and it has become an important estate planning tool.
A person who creates a trust is known as the grantor. After the trust is drafted and executed the grantor transfers ownership of assets to the trust. A person or organization called a trustee is appointed to manage the assets for the beneficiaries named in the trust. It is sometimes possible for the grantor to act as the trustee. And while trustees may be compensated for managing the trust, they must always act in the beneficiaries’ best interest, or in legal terms, in a fiduciary capacity.
There are two main types of trusts. The first kind is known as a testamentary trust. It is created in the grantor’s will and it becomes active only after the grantor has died. Property that is included in a testamentary trust must usually go through the probate process.
The other main type of trust is known as a living trust. It is created while the grantor is still alive and may continue after his or her death. If the assets of a living trust are put into the trust before the grantor dies, then the trust may not have to go through probate. A living trust may be either revocable or irrevocable. If a trust is revocable, the grantor can change or revoke the conditions of the trust at any time before his or her death, but with an irrevocable trust, the grantor generally cannot change anything about the trust once it is in effect.
Trusts have many important uses in estate planning. Seeking the advice of a lawyer who is experienced with estate planning is advisable if someone is considering a trust.
Source: www.findlaw.com, “Trusts: an overview“, accessed May 26, 2015