Trusts are Useless if You Do Not Know How to Use Them
You read it correctly; a trust is entirely useless without skilled advice to go with it. After all, a trust is just a document. Much like a contract, a will, a power of attorney, or a set of instructions from a furniture store, a trust does nothing until a living person takes action. So, although it is important to draft the trust correctly, many times it is the attorney advising the trustee later that makes all the difference. If you have been named trustee of a Florida trust, and you are concerned about honoring the deceased individual’s wishes, while protecting yourself from potential liability, then you should really consider working closely with a skilled Fort Lauderdale estate lawyer. Here are a few considerations about how a trust can and should be used.
Fiduciary Duties of a Trustee
Once you become trustee of a trust in Florida, you actually take on quite a lot of responsibilities. While this is a good thing in many respects, it also means that you need to know what you are doing so that you do not get yourself into trouble. For example, a trustee has an obligation to provide an accounting of what is in the trust to each named beneficiary. Say that you were named trustee for an affluent family member who passed away recently. You discover the trust and it describes a lot of assets, real estate, bank accounts, and other items that you now need to collect and disburse according to the provisions written in the trust document. You must provide a detailed accounting to all named beneficiaries, so that they know what assets are there.
Notice to Beneficiaries
Notice goes hand-in-hand with accounting. Under Fla. Stat. 736.0109, there are specific rules for how that notice and accounting is to be given. If you fail to do give notice, you could run the risk of a beneficiary suing you personally for violating their rights. You can be held individually liable for breach of fiduciary duty if you mishandle the funds and assets of a trust.
Dealing with Creditors and Debts
Perhaps just as important as protecting the beneficiaries’ rights to assets, you must also protect the rights of creditors. If a creditor has a legitimate debt against the decedent, then they will generally need to file a claim with the probate court. However, when a person properly creates a trust, there is often no need for a public probate matter. Instead, the trust is handled privately, outside of court. Moreover, a trust is technically a separate entity from the deceased individual, so most debts the person incurred during life will not be levied against the trust, but this is not always the case. Some debts can pierce a trust and will need to be paid. A Miami trust lawyer can help you understand the difference.
Things to do Before Death
As a final note, there are a lot of things that should be done long before someone passes away. Yes, drafting a quality trust is important, and that is something a skilled estate planning lawyer near you can handle. However, once that document is executed, there are still a couple final steps to take before the trust can really be effective:
- Fund the trust – You have to actually transfer the title assets into the trust. A trust document is nothing but a piece of paper unless you create accounts in its name and move assets into the trust. This can be as simple as opening a trust bank account and transferring funds into it.
- Transfer real estate – As part of funding the trust, you will also need to transfer title to real estate into the name of the trust.
- Talk to the trustee early – If you are the person who needs a trust, then you really should consider speaking with your chosen trustee early. Find out if they want the job. Find out if they are comfortable with the responsibility, and determine if they will be in a position to take on the work associated with the role when you pass away.
Get Skilled Guidance Throughout the Process
From the point of creating and executing the trust all the way through helping the surviving family members and trustee understand and administer the trust properly, a skilled Florida trust lawyer may be able to save you thousands in lost assets and substantial wasted time. Plus, working with an attorney will also help you avoid individual liability. So call the Sejour-Gustave Law Firm, PLLC. Our attorney has a long history of helping families find the right plan to suit their needs. Call or find us online to set up a consultation to discuss your unique situation today.