Elder Law, Probate & Personal Injury Attorneys

Serving the Tampa Bay Area

Member: National Academy of Elder Law Attorneys and the Academy of Florida Elder Law Attorneys. District Legal Counsel for the following special purpose community development districts: Circle Square Woods Community Development District, Bay Laurel Center Community Development District, Candler Hills Community Development District, Indigo East Community Development District. Formerly an arbitrator with the American Arbitration Association. Formerly a Circuit Court Certified Mediator.

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Living Trust Questions

Attorneys

1

Is there any specific amount of assets that a person should own before they need to have a living trust?

Not necessarily. In the past there was a prevalent view (probably misconceived, by the way) that a person needed to have at least $600,000 before they had to have a living trust. That number is irrelevant now anyway, but the point of it was to suggest that living trusts were only for the affluent. In fact, living trusts may be worthwhile for anyone who has the need and wish to avoid probate proceedings at his or her death. Living trusts are also very significant estate planning vehicles to provide for physically and mentally challenged men and women and for those who are disabled. And of course, it is also true that living trusts are important in estate planning for individuals with federally taxable estates.

2

Do I need a living trust if, instead, I have a Will and durable power of attorney?

The question is not so much whether you need a trust, as it is whether a trust is what will most accomplish your particular estate planning needs and goals. If you have a Will, then the assets you own or control at your death will pass to the persons you have named in that Will; but first they will have to pass through court proceedings known as probate. In fact, probate proceedings are not as terrible as various folks have portrayed them, but clearly probate has its disadvantages. A durable power of attorney automatically expires upon the death of the one who made it, so it is of no help in avoiding probate. Also, the Court can suspend a durable power of attorney in the event that the one who made it is determined by that Court to be incapacitated. This is not to say that durable powers of attorney are not important documents. I think that everyone should have one in which a close relative or trusted advisor such as his or her attorney has been named. A durable power of attorney is one of the most important planning tools available for estate planning.

3

If I have a living trust will I lose my Florida homestead exemption?

Not if the trust is properly drawn to allow the trustee to obtain the exemption; and if the trust allows the Grantor to live in the home for life. The key is that a reputable attorney who understands estate planning should draw a living trust. I have seen several of these form living trusts that can be bought cheaply through some newspaper or magazine ad. In my opinion they are not worthy of the money spent on them.

4

What are the income tax consequences of putting my assets into my name as trustee of my living trust?

When a living trust is created by someone for his/her/their benefit, it is considered by the I.R.S. to be a “Grantor” trust. The Grantor can continue to file income tax returns just the same as before (Although I usually suggest that a notation be made in the tax return to the effect that assets are held by the taxpayer in his/her/their living trust.) The same social security number can be and should be used. As such time as a successor trustee takes over a new tax identification number will be needed, unless the trust assets are distributed prompted to the heirs and beneficiaries.

5

Do I lose control of my assets when I put them in a living trust? I don’t want that to happen?

It won’t happen unless you specifically direct that it does. When you have a living trust created all you are doing is creating a relationship with yourself. That relationship with yourself allows that portion of your estate that is held in trust to avoid probate proceedings, may well also avoid the impact of the Florida Guardianship Law, can maintain the confidentiality of your estate and can speed up the process of getting your estate settled. You lose no control of your assets while you are alive and have your capacity, because you are the one who is managing them.

Gerald R. Colen

Lawyer

727-545-8114


Mr. Colen concentrates his practice of law in the areas of elder law, asset protection planning for individuals and business owners, special local government issues, real property and title insurance law, simple and complex estate planning, wills, trusts and probate.

Rachel M. Wagoner

Lawyer

727-545-8114


Mrs Wagoner’s experience covers a broad range of real estate law and estate planning, including assisting clients in purchases, sales and leases of property, assisting in foreclosures and workouts; advising on questions of condominium law and much more.