Whereas probate is generally the process by which a will is determined to be valid, trusts can be established during an individual’s lifetime. After an individual’s passing, most trusts also bypass probate.
However, what happens when a decedent’s estate has debts? Under Florida law, a revocable trust may be liable for those financial obligations, at least for up to two years after the decedent’s death. However, an individual can plan for this contingency in the trust document. In fact, a variety of scenarios can be anticipated, including the creator’s incapacitation. By naming a co-trustee or successor trustee, a revocable living trust can provide for the creator’s care if he or she is no longer able to make financial or other decisions.
In fact, a living trust can be a way to accomplish the objectives of other estate-planning documents, such as a durable power of attorney, in one fell swoop. Those objectives may include reducing taxes, protecting the trust principal from overspending with a spendthrift clause, or even placing restrictions against access so that a beneficiary’s creditors won’t be able to go after the trust. With the help of an attorney that focuses on wills and trusts, an individual can prepare a trust with as many restrictions as desired.
An attorney can also provide insight about choosing a successor trustee for a living trust, after the creator has passed and the trust has become irrevocable. The job should not be taken lightly, as the trustee manages the assets of the trust, makes investment decisions and distributes assets to the beneficiaries according to the trust instructions.
Source: Florida Legislature, “Florida Trust Code”