Trusts are legal arrangements that can provide incredible flexibility for the ownership of certain assets, thereby enabling you and your heirs to achieve several significant personal goals that cannot be achieved otherwise.
The term Trust describes the holding of property by a Trustee, which may be one or more persons or a corporate Trust company or bank, under the provisions of a contract, the written Trust instrument, for the benefit of one or more persons called beneficiaries.
A Trust created by a will is called a Testamentary Trust, and the trust provisions for such a Trust are contained in your Will. A Trust created during your lifetime is generally called a living Trust or an Inter Vivos Trust, and the Trust provisions are contained in the Trust agreement or declaration. The provisions of a Living Trust or Inter Vivos Trust (rather than your Will or state law default rules) usually will determine what happens to the property in the Trust upon your death.
The Victoria Law Group is willing and able to help you ensure that your family’s financial goals survive.
Please contact us when you are ready to have this serious conversation.
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Just like Will, a Trust is a method for exercising control over your assets and is an effective tool by which you decide how to enforce it.
A Trust does not require a Probate. This is often understood as an advantage of people using a Trust over a Will to distribute their assets. Trusts are considered less expensive than a Will, and the terms of a Trust are private compared to a Will and Probate process whose terms are public.
The method of distribution of assets through the formation of a Trust is quicker. In a Trust, the Trustee is authorized to distribute assets without the requirement of filing documentation and exercising formalities with the Probate court. When compared to Wills, Trusts also eliminate costs by saving estate taxes.
Probate is a process that is supervised by the Courts in the State of Florida. The process is governed by the Florida Probate Code (which is a part of Florida Statutes) and the Florida Probate Rules. Probate proceedings are filed with the circuit court where jurisdiction depends on the deceased person’s last resided place. Transfer of ownership of assets through a Trust, on the other hand, does not involve filing through a court and is much simpler that way.
One may expect the cost of forming a Trust to vary depending on the size of the Estate, the number and variety of assets in the Estate, and the number of attorney hours associated with drafting the Trust.
Florida is a State where Trusts can last almost into perpetuity. The Trusts can last even more than 360 years in Florida. But it is also true that a Trust need not necessarily last that long. It can also be for a limited time frame or come to an end upon a certain “triggering” event. It must be remembered that Trust, when created, may last for the lifetime of the person creating it and even beyond.
To sue a Trust located in Florida, a lawsuit is required to be brought in the Circuit Court of proper jurisdiction in Florida. The manner of suing a Trust is through filing a lawsuit.
Under the existing and prevailing law, Trustees are held accountable to the beneficiaries. Fiduciary duty has been imposed on the Trustees to perform duties following the highest standards of good conduct. The Trustee has a duty to administer the Trust in good faith and as per the provisions of the Florida Trust Code.
Section 736.0801 of the Florida Statutes is titled “Duty to Administer Trust.” The said provision provides for the following obligations for the Trustees to follow:
- The Duty of Loyalty is mentioned first in the Florida Trust Code. It obliges a Trustee to administer the Trust solely in the interests of the beneficiaries. The Code further goes on to highlight instances which will be considered a conflict between the personal and fiduciary duty of a Trustee.
- The next duty imposed on a Trustee is that of Impartiality. A Trustee is required to administer Trust and its duties impartially and fairly only in the interest of beneficiaries. The Trustee must give due regard to each beneficiary’s interest if there are multiple beneficiaries.
- The next duty a Trustee is required to fulfill is the Duty of Prudent Administration. It requires the Trustee to exercise reasonable care, skill, and caution in administering the Trust. The intent is that a Trustee should administer the Trust as a prudent person by considering the purposes of the Trust and prevailing circumstances.
- The Trustee is also endowed with a duty to Control the expenses of administration of the Trust. The expenses must be reasonable in relation to the Trust property, the purposes of the Trust, and the Trustee’s skills.
- The Trustee has another duty to control and protect the Trust property and must take all reasonable steps to do so.
- The Trustee also must provide all the necessary information related to the Trust to beneficiaries when requested to do so.
- A Trustee must keep the Trust’s property separate from his personal property.
- A Trustee is also required to keep clear, distinct, and accurate records of the administration of the Trust.
The Trustee has been endowed with duties by a statute i.e., the Florida Trust Code. In situations where the Trustee is not doing his duties or not performing the required tasks, a Trustee may be sued by any beneficiary. Generally, a Trustee is sued by initiating a lawsuit within four years.
The lawsuit is brought at a place with which the Trust has a connection. For a Trust located in Florida, a lawsuit may be brought in the local Circuit Court of appropriate jurisdiction in Florida. If the county has separate Probate divisions, the lawsuits are brought there, but if it is otherwise, then the lawsuit is brought in the general Civil Division of the Circuit Court.
The place of jurisdiction depends upon the circumstances of the case, location of the Trust, and the Trustee’s location.
The relevant law with respect to this question is contained in the Florida Trust Code. It must be noted that neither the Code nor the Florida Rules of Civil Procedure make it mandatory to hire a Trust lawyer to bring a lawsuit successfully.
But it is advisable to hire a lawyer as the matter may take highly complicated and technical turns.
Here are some examples of assets which are exempt from Probate in Florida:
- A life insurance policy,
- annuity contract,
- individual retirement account payable to a specific beneficiary etc.