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The Difference Between Revocable and Irrevocable Trusts

A living trust is an important legal tool that gives people the power to distribute their assets when they die in a way that avoids much of the complication of the probate process. Setting up a trust takes some work on the front end. It’s important that South Floridians considering this option consult an experienced Miami estate lawyer. The attorney can also help you decide between a revocable and irrevocable trust.

Usually when a person dies in Florida, his or her assets are distributed in a legal process called probate administration. A judge assigned to the case will consider all of the claims on your assets from creditors and (likely) distribute the assets according to your will, if you have one. Probate can be a timely process because courts must give creditors up to two years to file claims seeking payment from the estate and have to hear any valid legal challenges to the will.

The trust option avoids probate by transferring a person’s assets before he or she dies. The person (grantor) signs an agreement designating a trustee—often a bank, financial institution or another professional—to manage the trust. The grantor can also serve as the trustee. The assets are moved into the trust, where the grantor can still access them, and the trust document instructs how they are to be distributed when the grantor dies.

Choosing a Trust Option

As its name suggests, a revocable trust can be revised, modified, or completely scrapped by the grantor at any time. The grantor must transfer much his or her assets to the trust, but he or she can change who gets which asset upon death. The only limit is that the grantor must not be incapacitated at the time of the modification or revocation

An irrevocable trust, on the other hand, generally can’t be modified or terminated. The grantor gives up that right when he or she forms the trust, handing over the reins to the trustee. Although the grantor can still access the assets in the trust, he or she can’t change their mind about where those assets will go upon death.

Many Floridians thinking about estate planning like the revocable trust option because of the flexibility that comes with it. The primary benefit of an irrevocable trust is that it allows people with significant assets to avoid or limit certain estate taxes on the property. A person weighing the two options is well advised to seek the guidance of an experienced Miami estate lawyer.

Contact the Miami Estate Lawyers at Hoffman & Hoffman P.A.

Hoffman & Hoffman is a South Florida estate planning law firm whose attorneys help people manage their assets and decide how property will be distributed in the event of their death. Our Miami probate lawyers are pleased to represent clients throughout South Florida, including in Ft. Lauderdale, West Palm Beach and Coconut Grove. Contact us at (305) 831-0948 to speak with an attorney.