A Last Will and Testament, or a “Will”, is perhaps the most well-known legal document in our culture, and anyone concerned with distributing assets at their death is likely to think they need to “get a Will”. However, using a Will to pass assets to family and friends often results in lengthy delays and significant administrative costs before assets are distributed.
The reason for this delay is that a Will must be submitted to “probate”, a legal process by which a judge oversees the distribution of a deceased person’s assets. Probate administration in the state of Florida requires numerous filings, many of which must be served on “interested parties” in the probate matter who must then be given time to respond and/or challenge the substance of the filings. In short, there are numerous ways estate administration can be drawn out if parties to the proceeding are hostile towards one another, and even if all parties are cooperative it may still take the better part of a year before assets are finally distributed. Additionally, attorney’s fees and filing costs associated with probate administration may be thought of as “hidden” costs associated with the creation of a Will.
A revocable trust agreement can instead be used to distribute assets at death while reducing much of the time and cost associated with the probate of a Will. A Revocable Trust Agreement involves a person, called the “Grantor” or “Settlor”, transferring his or her assets to a “trustee”, who agrees to manage trust assets in accordance with the terms of the trust agreement. The revocable trust is structured to permit the Grantor to retain full access to trust assets (often by having the Grantor serve as the initial trustee), such that for the remainder of the Grantor’s life assets may be used in much the same way as it was before it was transferred to the trust. Additionally, the terms of a revocable trust agreement may be revised, altered or amended at any time during the Grantor’s life, which provides the Grantor with virtually unlimited control over the ultimate distribution of assets at death.
If the trust is properly funded, trust assets will not be subject to probate proceedings when the Grantor dies. Instead, terms contained in the trust agreement will instruct the trustee or the trustee’s successor how to manage or distribute trust assets, and because the trustee will already be in possession of trust assets it will allow for assets to be distributed faster than might otherwise be possible in a probate proceeding.
For more details, please contact W. Scott Johns V or give him a call at 561.686.3307.