A Simple Will May Not Be Enough: A Revocable Trust Can Serve You Now and After You Are Gone

“How can I ensure my property provides for my family when I pass away?”  

“Who would take care of my finances when I am unable to make decisions on my own?” 

These are very important questions that everyone should consider, regardless of their health, age or economic status.  While the law establishes default rules for how these questions are answered, those rules may not line up with your situation.  Basic estate planning documents, such as a Last Will and Testament (“Will”) can help answer these questions according to your needs and wishes.  But is a Will alone enough?  

A Will is for Probate Administration

A Will is an important legal document that controls the disposition of property at a person’s death.  All the property owned in a decedent’s individual name (with some exceptions and exemptions) is included in that person’s estate.  Estates governed by a Will are testate, while those without Wills are intestate.  A Will ensures that your wishes control instead of the statutory defaults.  The place for those wishes to be known is in probate court.   

Probate is the judicial process through which your estate is distributed after death.  During probate, your Will is made part of the public record, and your estate is subject to a court’s supervision.  Both testate and intestate estates must pass through probate—A Will does not avoid probate.  

In Florida, the person in charge of the estate during the probate process is called the Personal Representative (some states call this role the “executor”).  You can appoint a person in your Will to serve as Personal Representative, but the law places some restrictions on who qualifies to serve in that capacity. For example, a relation to the deceased, state residency, and felony convictions may impact eligibility to serve as a Personal Representative.  Furthermore, if you own property in more than one state, multiple ancillary probate proceedings may be necessary. 

Probate can be a long and expensive process with many rules, and while creating a Will is a necessary step in making your wishes known, there are additional documents that accomplish the same goals while simplifying the process and potentially avoiding the bulk of the probate process.   

Estate Planning Documents During Your Lifetime

A Will is a powerful legal document, but it only takes effect at your death.  What happens to your property during surgery, prolonged unconsciousness, or when cognitive abilities start to fade?  A Durable Power of Attorney is a great document to have in these situations, but Agents under such a power have access to your property at the time you sign the document (even without being incapacitated).  Without a Durable Power of Attorney, it may be necessary to establish a Guardianship over your property.  This is a lengthy, invasive, and expensive process.

While a Will is only effective at your death, a Durable Power of Attorney is only effective during your life.  So, while both documents are useful for the time they are in effect, a Revocable Living Trust is effective during your lifetime and after your death.   

Revocable Living Trusts

The questions at the top of this article pertain to your property at death as well as during your incapacity.  An ideal situation is to avoid both probate and guardianship as much as possible while retaining control over your assets.  Here is where a Revocable Living Trust can be an excellent addition to a comprehensive estate plan. 

A Trust is an agreement that establishes a relationship where a Settlor (the person making the Trust) gives legal title in property to a Trustee for the benefit of the Settlor’s chosen beneficiaries.  A Revocable Living Trust is a Trust you make during your life (hence, living) over which you retain the power to amend, modify, or revoke (hence, revocable). 

Your Trustees will have broad powers over the Trust property, but they are legally required to follow the terms of the Trust and put the interests of the beneficiaries above their own interests.  The good news is that if there are more beneficiaries than the Settlor alone (such as a spouse, children, charities, etc.), then you can be both the Settlor and Trustee of your Trust.  This means that while you are alive and capable, you can hold the Trust property and use it as you see fit without giving any control to anyone else.  Upon your incapacity or death, your named successor Trustees (who do not have the same qualification requirements as a Personal Representative) can step into your shoes with detailed instructions for how to handle your assets. 

The terms of your Trust can take any shape you want.  During your incapacity, you can limit distributions to just your wellbeing or to take care of your spouse and children until you recuperate.  At your death, you can give assets outright or put restrictions on spending to make sure the property is preserved, kept in the family, or is used only for certain purposes.  Furthermore, you can change the terms through an amendment at any time if circumstances change. 

Trusts are useful for a wide range of family and financial circumstances that can simplify things at the end of life and after death.  Trusts do not replace the need for a Will or other documents, but the addition of a Trust can be a great tool to accomplish your estate planning goals.  

Contact Us Today

At Rossway Swan, our experienced estate planning attorneys can help you establish a comprehensive estate plan tailored to your wishes, finances, and family.  If you are considering setting up a Trust, or if you want to ensure your current documents align with your goals, please contact Michael J. Swan, William J. Stewart, or Ryan P. Cook for a free consultation.