You can think of a Revocable Living Trust as a shell or empty basket that
must have assets placed into it so that such assets are subject to the
terms of the Trust. The first step to creating a Revocable Living Trust
is executing the proper documents with the correct signing formalities.
Specifically, in Florida, a Revocable Living Trust must be executed in
front of two witnesses and a notary. The statute actually refers to the
execution requirements of a last will and testament in its statutory language
when discussing the execution requirements of the revocable living trust.
Florida has one of the most stringent requirements for formation. For
instance, in Louisiana, only a notary is necessary to property execute
a Revocable Living Trust document. Therefore, a trust established in Florida
will likely be valid under most state laws/jurisdictions.
Once the Revocable Trust Agreement is executed, assets need to be transferred
to the custody of the Trustee who is managing the Trust Fund. Typically,
the initial Trustee is the Settlor/Grantor and/or his or her spouse and
the successor Trustees are either family members or independent trustees
(such as a bank) in the case where choosing family members is not the
most prudent choice. Sometimes, choosing an independent Trustee can limit
the potential for dispute.
The reason why funding a Revocable Living Trust (or transferring assets
to be subject to the document’s terms) is so important is because
when this is not done, the Trust provisions do not apply to said assets.
Each asset has its own process for being “funded” into the
Revocable Living Trust. For instance, the transfer of real property requires
a deed. The transfer of business interests requires an assignment. Brokerage
and/or bank accounts must be changed in the name of the Trust. This is
by no means an expansive list, however, it is important to educate clients
on the importance of transferring assets into the Trust. Without such
transfer, the Revocable Living Trust is merely an empty vessel. Learn
more about funding a Revocable Living Trust on our previous blog:
Contact The Presser Law Firm, P.A. if you or a loved one is interested
in having an estate plan prepared. Our attorneys are knowledgeable in
estate planning, asset protection and business law.