People in Florida who create an estate plan will often include a revocable living trust, also known as an RLT, as a key piece of that plan. If you don’t know much about these types of trusts, they afford some significant legal protections that simple property ownership does not.
For example, when you create an RLT and transfer some of your property to the trust, you get to determine how to transfer the property to others after you die without the necessity of that property first passing through the probate process.
However, like all other trusts, using an RLT means that your property will, technically, no longer be your own. Instead of owning your property under your name, the property will be owned under the trust’s name. When people creating an estate plan first hear of this, they often have a number of questions.
Will I lose control over the property I transferred to a living trust?
No. In most situations, property owned by an RLT is, for all intents and purposes, still yours. Though it’s true that the property title will be held in the trust’s name, you maintain effective control over the property at all times.
If the trust owns the property, how can I maintain control?
In order to understand how an RLT works and why someone creating this type of trust always maintains control over the trust property, you have to understand some basic premises.
First, a trust is only created when a person, called the trustor, decides to create a document that states what the trust will do and how it operates. This document, called the trust instrument, will include the specific terms or rules that apply to the trust, as well as the names of the important people involved in the trust. These people include the trustee and the beneficiaries. The trustee will manage the trust property while the beneficiaries get to enjoy the use or benefit of that property.
The twist comes when you realize that the person creating the RLP is all of those people: the trustor, the trustee, and the beneficiary.
This means that when you create a revocable living trust and transfer some of your property to it, there is no point when you do not maintain control over everything you transfer to the trust.
How does transferring property to a living trust work?
Your estate planning attorney will fill you in on the details of how to transfer the title of any of your property into the name of your RLT. Though the process can be a little complicated, we should always remember that the property will always be under your control even if you choose to transfer it to the trust.
There is a lot more to learn about RLTs, but fortunately, you can attend one of our free living trust seminars so you can do just that. Visit our Seminars page for details and registration information.