This weekend, fourteen Venice Beach patrons were injured, with one fatality, when lightning struck near the pier. This was a rare occurrence and was not something the beachgoers were prepared for. Lightning strikes can be a lot like a probate hitting your family. Not only will they be dealing with the passing of a loved, they will have to deal with the long and complex process of probate.
In Florida, probate is the mandatory process of validating a will and distributing estate assets to the beneficiaries. During this time, accounts are frozen while the personal representative marshals the assets and prepares to distribute. Probate usually lasts at least six months and can last considerably longer depending on the size an complexity of the estate. Probate can lead to periods of illiquidity for beneficiaries as they wait for accounts to be unfrozen and distributions to be made, putting in dire financial situations.
The best way to avoid the hassles of probate is to use a trust based estate plan. With a trust based estate plan, a living trust is formed in your name and is funded using an assignment of property. Essentially, all of your property becomes property of the trust. While this might sound scary at first, it really isn’t. Because you are the grantor, trustee, and beneficiary of the living trust, you retain complete control over all your property and can do with it everything you could as an individual.
In addition to passing your property outside of probate, trusts provide creditor protection for your beneficiaries and give you as grantor an increased level of control from beyond the grave. Once you pass, your living trust will create individual irrevocable trusts for all of your beneficiaries. As grantor, you can name the trustee of each of these trusts and the contingent beneficiaries. If you have a child who is not fiscally responsible, you can name a trustee other than them who will manage the trust for the benefit of your child while making sure that your child doesn’t waste the money. If you have a child who is married to a spouse you don’t trust, you can make sure that the trust money passes to your grandchildren and not the spouse. Because the inheritance will be held in a trust, creditors will not be able to reach the money either.
Under a trust plan, a will is still used, but it is used as a funding document, rather than a distribution document. This type of will is referred to as a “pour-over will.” Pour-over wills act as a safety net, or a funnel, and makes sure that any property that you forgot to put in the trust (if you had just moved homes and not retitled for example) ends up in your trust. This property would still have to be probated, but only this property would have to be; all the property in your trust would pass outside probate as originally intended. After the probate, the pour-over will gives the property to the trust and it will receive all the benefits of all your other trust property.
For more information on successful Florida estate planning and asset protection techniques, please contact the South Florida law firm of Wild Felice & Partners, P.A. at 954-944-2855 to schedule your free consultation.
It’s a Wild world. Are you protected? SM