Trust

Many clients mistakenly believe that a Revocable Living Trust is only for the wealthy. The
most recent tax law passed by Congress provides $1,500,000.00 as a Federal Estate Tax
exclusion as of January 1, 2002. This increased to $2,000,000.00 on January 1, 2006.

However, your decision as to whether to have a Simple Will or a Revocable Living Trust
really has nothing to do with the Federal Estate Tax exemptions. The main purpose of a
Revocable Living Trust is to avoid probate in Florida. If the only real estate you own is your
home, your heirs would still greatly benefit from a Revocable Living Trust.

Let us assume that you are married and you own your home jointly. You have two children
and you want them to have your home when you both pass away. Your other assets
include CD’s, a brokerage account and an IRA.
Without a Revocable Living Trust, you could still avoid probate on all of your assets except
your home. You would simply name your children as the contingent beneficiaries for your
other assets. When you both pass away, your children would get those assets immediately
by showing the death certificate and identification.

However, the same is not true for your home. Without a Revocable Living Trust, your home
would have to go into probate. Probate involves hiring a lawyer, approximately nine months
in the court system, publication in the newspaper, attorney’s fees and costs amounting to
several thousand dollars or more depending on the value of your home. Your home would
also be tied up in the probate process which would mean that your children would not be
able to quickly sell it.

If you want your children to have the least aggravation and eliminate fees, costs and time, a
Revocable Living Trust makes the most sense. At the time the lawyer prepares the Trust,
there would also be a Quitclaim Deed prepared whereby you transfer the property from
your names individually to you as Trustees of your Trust. This does not change your ability
to sell your home, get a mortgage or refinance. You continue to claim your homestead
exemption. In fact, owning your home as Trustees of your Trust does not change anything
except that when you both pass away, there will be no probate of your home. Your children
will be able to get clear title to your home within weeks, as soon as the death certificate
and certain other standard documents are recorded. There is no probate, no court
supervision, no notice in the newspaper and no need for an attorney. An attorney or
paralegal can assist the children with the administrative process or instruct them to do it
on their own.

The Trust document also has a paragraph regarding disability. If you become disabled
based on two doctors’ written statements, your Successor Trustee can take over during
your disability without going to court.

You may also wish to consider having a general Durable Power of Attorney to take care of
your legal and financial affairs outside of your Trust. In addition, there is a document called
a Designation of Health Care Surrogate which provides for making all medical decisions in
the event of incapacity. The final document which most people already have is a Living Will
which is the so-called pulling the plug document. These documents are generally separate
from any Revocable Living Trust.

The Trust document is called revocable because you can change it or terminate it at any
time during your life. If you wish to make changes, an amendment to the Trust is prepared.
The original Trust document remains in effect as to any amendments.

This article summarizes the basic concepts involved in a Revocable Living Trust. It is
always important to speak to an attorney regarding your specific needs.

For a free consultation by phone or in person, please feel free to call me.

                      Martin Zevin, Attorney
                      (954) 569-4878

DO YOU REALLY NEED A
REVOCABLE LIVING TRUST?