Why Setup a Trust?
There are numerous types of trusts that can be used for a variety of purposes. However, the most common type of trust is a revocable trust. Also referred to as a living trust, declaration of trust, or revocable living trust.
A revocable trust is an agreement under Florida law that allows you to legally transfer your assets to a trust. If properly created and managed, a revocable trust can control the distribution of your assets after your death, as well as save your heirs a lot of time and money by avoiding probate, the attorney fees and court costs.
The main reason to form a revocable living trust is to save time and money. If any part of your estate (or your parents’ estate) goes through probate in Florida, the estate MUST hire an attorney to represent the deceased. Attorney fees in a probate matter typically start at $1,500 and can be as much as 3% of the value of the estate ($1,000,000 estate assets = $30,000 attorney fees). Court costs and fees will generally be at least $500. In addition to the fees, there are procedural timetables that must be followed. These usually result in delays of weeks and months.
What Does It Cost?
At Dowd Law we draft simple revocable trusts and joint declarations of trust for individuals and couples. Most clients do a complete estate planning package, which includes a pour-over will, designation of health care surrogate, durable power of attorney, and a living will. The complete estate planning package is only $1,000 for an individual, and $1,500 for married couples. A simple revocable trust for an individual is only $750, and $1,000 for married couples.
There may be additional fees and cost related to the transfer of assets into the trust, i.e. the preparation and filing of deeds ($150 plus filing fees and documentary stamp tax).
Can I Do It Myself?
Setting up a trust is a relatively simple process. Unfortunately, the reason most trusts fail isn’t because they are invalid or setup wrong. It’s because they aren’t properly funded.
There are a lot of document preparation services that are cheaper than attorney. And most prepare the documents correctly. All of which would have to be state specific. There are also a lot of document templates available online for FREE, or for very little money. However, trust laws vary by state and the templates may not conform with Florida law. Likely making any such trust invalid.
The REAL value of using an estate attorney, a lawyer that commonly does wills and trusts, isn’t the document that gets prepared. It’s the advice and guidance to ensure that the trust is setup properly. And, then properly funded. After all, if the trust isn’t properly funded, it doesn’t matter how well written the trust is or who wrote it, because it will be nothing more than an expensive stack of papers.
The Real Value of a Trust
The real value of a trust, if setup and funded properly, is security and peace of mind! Death can be one of the most stressful events in a persons’ life. You have to deal with the loss of a loved one, and in many cases, you have to finish up everything they left behind. Whether it’s assets, personal belongings, or a house full of junk, someone has to handle it or get rid of it.
Just consider if all of your stuff had to go through probate before anyone could do anything with them. Who is going to be responsible for handling that? It’s likely going to be someone that is affected by your death. You are asking that person, while dealing with your death, to pay all your bills, collect, distribute, and sell all of your assets, file your final tax return, clean out your house, and many other things. Now add to that … they have to hire an attorney and go through the courts to get any of it done!
A properly setup and funded revocable trust saves you from having to hire an attorney, go to court, or get the court’s permission to do anything. It can save a ton of time and money, and more importantly, a ton of stress at an extremely stressful time.