Florida residents can use trusts to reduce estate taxes and ease the probate process for their loved ones. Living or revocable trusts can be changed over time, giving the trustor more flexibility than traditional trusts.
First steps to creating a living trust
There are two types of living trusts: a joint trust and an individual trust. A joint trust is usually created with your spouse or life partner, but married couples can still have separate living trusts. After you’ve decided on a joint or individual trust, you’ll have to decide how to fund it. Sometimes living trusts can include savings accounts, heirlooms, or cars. Other things you can use to fund your living trust are:
- 401(k) or IRA
- Stocks
- Real estate
You should include all the paperwork related to the assets, such as titles or certificates of ownership.
Choosing a trustee
A trustee is the person who will manage the trust. This includes making financial decisions for the trust as well as managing payouts. You can act as the trustee, but you would want to select a successor trustee. The successor trustee is usually a child or other relative, but it could also be a family friend.
Creating the trust and making changes
After figuring out these details, you will work with an attorney to create the trust. You will need to make all changes to the trust with the help of a trusted attorney. You can hire a service to manage your trust for a small fee as well. The important part is ensuring that the trustee can manage the trust with your family’s best interests in mind.
The cost of creating a living trust scares some people. Trusts also make the probate process easier for family members and help to reduce estate taxes, which makes it worth the cost for many Florida residents.