When you create a living trust in Florida you give yourself some specific, and significant, benefits that simple property ownership does not convey. The property you place into the living trust can avoid probate. It will also pass to your heirs under the terms you set out, and do so privately. A living trust can also help you in the event you become incapacitated by allowing someone else to manage your property.
But living trusts are not always easy to use. Creating the initial trust document is only the first step in making sure that your trust provides you the benefits you’re looking for. After you write the trust you will have to take some additional time to devote yourself to maintaining it. Failing to do so can be a serious mistake, and one that can lead to significant complications later on. Here are some simple mistakes and errors you need to avoid when using your living trust.
Fund, Fund, Fund
One of the most important steps involved in creating a living trust is the process through which you transfer your personal property to the trust to own. This process, called funding, gives your living trust its teeth. Without funding the trust, you essentially create a blank document that is little more than decoration. Only the property that you properly transfer into the trust’s name will be able to avoid probate. Without funding, you effectively give up all of the benefits your trust provides.
Living Trust Paperwork
Creating a living trust adds an extra step whenever you buy and sell property. For example, let’s say that you have transferred all of your property into the living trust. You decide that you want to sell your car. While you are perfectly capable of doing this, you have to take the time to perform the extra step of taking careful note of the transaction. Though this doesn’t usually take a lot of time, it is a necessary step that you have to take.
Almost everyone who creates a revocable living trust chooses to serve as the trustee as well as the beneficiary. In some situations you might want to choose someone else to serve as trustee. Regardless of your choice, you will always need to select a successor trustee.
The trustee is responsible for managing all trust property. Your choice should be someone who is comfortable managing financial responsibilities and keeping track of property. For example, the trustee needs to be someone who will be able to keep and adjust a trust schedule of assets as the trust property changes.
Always choose the right trustee for your needs. Your estate planning attorney will give you advice about the types of trustees you should consider given your individual circumstances and trust terms, but taking the time to carefully consider your options is essential to making sure you select the right person for the job.