Oftentimes, there are general misconceptions about estate planning. This article provides a brief overview of Revocable Trusts and, hopefully, clarifies any questions you may have regarding them.
MYTH #1: Only wealthy people need a Revocable Trust.
It’s a common misconception that one needs to be wealthy to create a Revocable Trust; that’s far from the truth! A Revocable Trust is a time-saving and cost-effective estate planning document created for families of all income levels who want to avoid the Florida probate process. Creating a Revocable Trust is a very affordable and ideal option when compared to the Florida probate process, which is time-consuming and costly.
MYTH #2: You can only have one Revocable Trust created during your lifetime.
A Revocable Trust is a document that you create during your lifetime to manage all of your assets. The person(s) who creates the Revocable Trust is called the GRANTOR. There is no requirement on the number of Grantors, so there can be multiple Grantors (for example, a husband and a wife). The person who manages the assets of the Revocable Trust is called the TRUSTEE. Again, there is no requirement on the number of Trustees, so there can be multiple Trustees (for example, a husband and a wife). Additionally, the Grantor(s) may serve as the initial Trustee(s), or another person or company may serve as the Trustee.
MYTH #3: Once you create a Revocable Trust, you cannot make any changes to it.
The most common scenerio is that you are the Grantor, and you are the initial Trustee. In this case, you are permitted to add or withdraw assets from the Revocable Trust during your lifetime without any type of restriction. If the trust created is a “revocable” trust, this implies that the trust can be amended as many times as the Grantor(s) decide that the trust should be changed. Furthermore, since the trust is a “revocable” trust, the Grantor(s) may choose to terminate the trust at any time.
The Revocable Trust will also identify all of its beneficiaries. Typically, the Grantor is the original beneficiary. This means you can withdraw the assets from your trust at any time. Once the Grantor dies, the assets are transferred to the named beneficiaries and avoid the Florida probate process. For more details, refer to our Probate page.
After the Revocable Trust is signed, it is crucial to “fund the trust.” Funding the trust entails transferring ownership of your assets into the trust (properties, stock investments, etc.). If you fail to fund the trust, the Revocable Trust still exists, but there is nothing in it. If there are no assets held in the Revocable Trust, then it is most likely that those assets are still in the Grantor’s name and they would need to go through the probate process upon the death of the Grantor.
Please contact Estate Planning Attorney, Kimberly Soto at 321.972.2279 so she can further advise you first to determine whether you need a Revocable Trust and second what assets should be transferred into your Revocable Trust to prevent probate. The Soto Law Office, P.A. is conveniently located in Altamonte Springs, Florida near I-4, and proudly serves the residents of Altamonte Springs, Apopka, Casselberry, Longwood, Ocoee, Orlando, Brevard, Lake, Orange, Osceola, Seminole, and Volusia Counties.