West Palm Beach Trusts: Will Replacements, What Powers Can You Keep as a Settlor or Trustee During Your Life?

Have you considered a will substitute in the form of trusts?  West Palm Beach probate litigators know that will substitutes have several distinct advantages from a standard estate plan utilizing a Last Will and Testament. In fact setting up a trust through a Pay on Death account could cost you nothing and afford you a way to avoid probate. Do you know how?

Advantages of Revocable Trusts

• A revocable trust can be a convenient way to manage assets, plan of incapacity and to avoid probate costs and delays.
• Not to mention added privacy as the Will won’t be filed and made public.
• Remember these trusts are ineffective to disinherit a spouse i.e. they wont defeat the elective share, because they are part of the elective estate.

Powers Settlor May Retain

• In Florida and West Palm Beach an otherwise valid inter vivos trust does not become invalid merely because the settlor retains certain powers.
• Do you know what those powers are?
• You may as a settlor retain the rights to revoke, alter, amend or modify the trust, appoint income or principal by deed (or will), add to or withdraw from the trust, remove trustees (and appoint new ones), control the administration of the trust, receive income or evento act as sole trustee!

Pour Over Gifts from Will to Revocable Trust

• Under Florida’s Uniform Testamentary Additions to Trusts Act a settlor may make gifts to a trust through a will.
• This includes a gift to revocable / amendable trusts made during their lifetime.
• The trust instrument must be executed before or at the same time as the will and trust may remain unfunded until the settlor’s death.
• This is a rare exception to the rule that a trust must be funded with property or it will fail.
• The trust should be clearly identified by the language of the West Palm Beach Will, in other words it should not just say to my trust but the name of the trust.

Life Insurance Trusts

• Life insurance and similar death benefits in West Palm Beach may be paid into an unfunded revocable trust whose only purpose is to receive such funds.
• Any spendthrift provisions provided in the insurance contract inure to the trust as well.
• Thus the insured’s creditors cannot reach the trust or its assets.

Pay on Death Accounts / Transfer on Death (“Totten Trusts”)

• In a Totten trust a bank account depositor merely indicates that property will be held in trust for another.
• Another way to do this is to write Pay on Death or Transfer on Death in the account as well.
• These are non-probate assets.
• These are not trusts in the traditional sense because there is no division between legal and equitable title.
• Also the settlor retains full authority to transfer or withdraw and use the funds until their death.
• This is a great alternative if the funds are too little for a trust or you lack the resources to create a trust.