Trusts have long been an important part of many Florida estate plans. The trust instrument has evolved to include specialized forms for all sorts of specialized situations, but the living trust continues to be among the most popular and useful of estate planning devices. A living trust, also known as a revocable trust, revocable living trust or inter vivos trust, is created during the life of the grantor. The trust may be created for any number of reasons, but two of the most common are asset management and avoidance of probate on death.
As part of the establishment of the trust, the grantor names a trustee, who manages assets according to the terms of the trust instrument. The grantor may choose to act as trustee or name another person or entity. In some situations the grantor may name a co-trustee to share the responsibilities.
A living trust may be similar to a will in that it may provide direction for the distribution of assets to beneficiaries upon the death of the grantor. Unlike a will, though, a living trust may also direct the trustee to continue to manage the assets, for the benefit of certain parties, following the death of the grantor. Another advantage of trusts over wills is that they generally avoid probate, saving beneficiaries the time and expense of that proceeding.
Living trusts may also direct the management of trust assets should the grantor become disabled or incapacitated. An estate planning attorney may be able to help interested parties evaluate the potential advantages and limitations of a revocable living trust in a particular situation. The attorney may also draft the legal documents necessary to establish a trust as part of a comprehensive estate plan.
Source: American Bar Association, "Estate Planning FAQs", October 06, 2014