What is a Florida Living Trust?
By creating a living trust in Florida, you place your assets into a private trust which is fully controlled by you. During your lifetime, all the income earned by the trust will be yours and are transferred to the beneficiaries of the trust upon your death.
You can also create a Will for this purpose but Wills have to go through the Probate. Probate is a judicial procedure whereby the court determines the inheritors of the assets of a deceased person. One of the main benefits of a living trust is that its assets don’t have to go through probate.
Probate Shortcuts in Florida
Florida offers the following 2 simplified Probate procedures for people with small estates who have died. The inheritors of the property may be able to transfer the property using these two.
1. Disposition Without Administration
Disposition Without Administration is a quick and inexpensive informal probate process in Florida, designed for estates of minimal value. It is used to request the release of assets of the deceased to the person who paid the funeral and/or final medical bills.
Florida Statute §735.301 deals with this process of Disposition Without Administration.
The following assets are exempted under Disposition Without Administration.
- Household goods or furnishings up to $20,000 in value.
- 2 personal motor vehicles of the deceased.
- Any qualified tuition plans under Section 529 of the Internal Revenue Code.
- Personal property up to $1,000 in value.
- The property whose value doesn't exceed what's owed in the final expenses of the last 60 days of the last illness.
2. Summary Administration
Summary Administration is a simplified probate procedure in Florida for small Estates. It's an option if either:
- The person has been dead for more than 2 years
- The value of the probate estate is not more than $75,000.
A document called Petition for Summary Administration is required to be filed by the beneficiary or the executor of the deceased’s Will.
In case the deceased was married. The surviving spouse, if any, must also sign and verify the petition.
So, if you have a small estate as described above in Florida, you might not need to create a Living Trust. Still, there are many other benefits of making a Living Trust.
Can a Living Trust Reduce Estate Tax in Florida?
No. A basic Revocable Living Trust does not avoid Estate Taxes. Its main objective is to avoid Probate only. The reason it is common among people is its flexibility. The Grantor can alter or add changes to it anytime before his death.
Estate Tax is applicable at the federal as well as State levels in some states. So, even if you are exempted from Federal tax, you might be required to pay the state-level tax in some states.
The good thing is that Florida does not have its own estate tax.
The Federal Estate Tax exemption for the year 2023 is $12.92 million.
So, if you are living in Florida and your estate is not more than $12.92 million, you do not have to pay any estate tax.
I already have a Living Trust in Florida, do I still need to create a Will?
The purpose served by both Living Will and a Last Will and Testament is different. Both documents have their own benefits. If a Living Will provides privacy to your documents and avoids the probate; a Last Will and Testament have the following benefits:
- Appointment of Guardian
You cannot assign a guardian for your minor children in your Trust document. This can be done by way of Will only. Refer to this article for more information on Florida's Last Will and Testament.
- Accounting for property not transferred to Trust
There may be occasions when you create a Trust but forget to transfer some properties to it or there is any property that you inherit after creating a Trust(Joint tenancy). These properties will be transferred to your loved ones by way of Will.
If you die without creating a Will, and there is any property this is not transferred to your Trust. For eg., Joint Tenancy will be transferred through the Intestate succession Laws of Florida.
How to make a Living Trust online in Florida?
- Select the Property to be transferred to Trust
Not everything you own can be transferred to Trust. There are certain types of properties and assets like Retirement accounts, Vehicles, cash, etc which cannot be put into a trust.
- Choose the type of Trust
Choose whether you want to make an Individual Trust or a Shared Trust in case you are married.
- Name a Successor Trustee for your Trust
Think of a person who is reliable and trustworthy to be appointed as your successor trustee as he will step in your shoes in case you are ill or incapacitated.
- Choose Beneficiaries
Choose the persons you want to get your trust property after you die. You can include family members, relatives, friends, charities, and organizations as your beneficiary.
- Make your Trust Document.
After you are done with all of the above, you are ready to create your Trust Document.
Use a reliable, legal, and safe platform like TrulyWill to get your Trust Document ready.
You can start with the Do-it-yourself plan from TrulyWill which is the most convenient way if you have a simple financial and personal life.
If you are still confused with TrulyWill’s platform, you can use the attorney assist feature for any legal advice.
- Sign and Notarize your Trust.
The trust document needs to be executed as per your State laws by signing it in front of a Notary. Unlike Wills, you don't need the signature of witnesses in your Trust Documents.
Funding of a Living Trust Fund involves the process of transferring assets like money, stocks, bank accounts, businesses, etc. into the Trust.
A trust will own only those properties which are transferred to it. If a property is not transferred to a Trust it might be subjected to probate or Estate tax.
- Store your Trust in a safe place.
Once you are done with all the above formalities of making a Trust, you need to store it in a safe place to avoid being lost or stolen.