There can be both benefits and risks with a living trust
A living trust can be a solid addition to a testator’s estate plan. But this kind of estate planning tool is not for everyone in Florida, and it’s important to understand that this kind of trust offers both advantages and disadvantages. So here is a brief look at some of the benefits and risks of this type of estate planning tool.
One of the benefits of a living trust is that they offer more FDIC protection than a typical bank account. For example, a checking or savings account is only protected up to $250,000 by the FDIC. Typically, many senior citizens have saved up more than that in their account. By keeping more than the protected amount in their account, they face the potential of losing a great deal. But with a living trust, each beneficiary of the trust is insured to $250,000. Therefore, if a testator names five beneficiaries to the trust, the FDIC value of the trust is $1,250,000.
Living revocable trusts are estate planning tools that typically do not go through the probate process. This is a tremendous help for the beneficiaries of the trust, since what is in the trust will not be publically disclosed. However, there is one situation when the contents of a trust could be disclosed. That could occur if one of the heirs of an estate takes the estate to court, then all of the contents of the estate may become part of the court record, which then means that it’s possible for the public to find out about the trust.
It’s also important to remember that a trust is not a replacement for a will. However, any Florida resident who is considering opening up a living trust may want to speak to an estate planning attorney in order to determine if this type of financial tool can be beneficial to them.
Source: bankrate.com, “6 surprising facts about a living revocable trust“, Judy Martel, Accessed June 6, 2016