family trust - Rarick Trusts & Wills Law, P.A.

What is a Family Trust?

Rarick Trusts & Wills Law, P.A. — Thu, 09 Jan 2025 14:00:33 GMT

What is a Family Trust?

By Phil Rarick, Weston Trust Attorney

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Every family needs instructions in the event of disability or death. A Family Trust, also known as a Living Trust, is your detailed, legally binding instructions to care for you and your family in the event of mental incapacity or death. A trust can accomplish all the goals of a will and in addition avoid probate and guardianship when properly funded. A will must go through a bureaucratic, expensive and time-consuming legal process called probate where the court may intervene in your personal or business affairs. This is why the Revocable Family Trust has become the preferred plan of choice over a will for most people; it is almost certainly the best plan if you have children.

Understanding a Family Trust – a/k/a Living Trust

There are three primary roles in a Family Trust: the grantor, trustee, and beneficiary.

The grantor is the person who makes the trust; the Trustee is the person who is legally found to follow the trust instructions exactly as stated in the Trust. And the beneficiary? Every dime of the trust must go to the beneficiaries. Initially, you can be the Grantor, Trustee, and, along with your spouse or children, the Beneficiaries.

Most Family Trusts are revocable because the grantor wants to retain 100% control over the trust instructions and change them whenever he or she wants at any time during their lifetime. Control and flexibility are two key goals in Trusts. The Trust has a major advantage over the mortal person: it does not become incapacitated, and it does not end at death. It continues to provide for your family as long as needed to help protect the lifestyle of your family. If you have children, it can help ensure they get a high-quality education and that the funds cannot be claimed by a spouse or creditor of the child.

Key Benefits of a Revocable Family Trust

Avoiding Guardianship. Guardianship is a bureaucratic legal process where the court supervises the person and/or property of a person. The court selects the Guardian. In my 30 years of practice as a Miami Trust attorney, I cannot recall anyone who wanted to allow a court to intervene in their personal or business affairs; almost all persons want a family member to take charge if they have a temporary or permanent incapacity. A trust can help you keep legal control in the family.

Avoiding Probate. One of the biggest advantages of a family trust is that it allows assets to bypass the probate process provided the Trust is properly funded. Probate is the court-supervised process of distributing a deceased person’s estate, which can be time-consuming, costly, and public. By transferring assets to a family trust, those assets can be distributed directly to the beneficiaries without the need for probate, saving time and money.

Protection for Minor Children and Young Adults. The Trust can help ensure that funds going to minor or adult children are used in a smart way. For minor children, a trust can help ensure that the minor child does not waste the funds by getting a big lump sum payment or that the funds could be claimed by creditors of the child after age 18. Rather, the trust can help ensure the child receives a first-rate college and graduate education. For adult children who may marry or are already married, the trust can provide protections so the adult child’s spouse cannot claim funds designated for the child.

Conclusion Whether you have $100,000 or over $1 million you should first consider a Family Trust or a Living Trust over a Will for your estate plan as a Trust that is properly funded will help avoid the bureaucratic legal processes known as guardianship and probate. Plus, the trust can provide strong protections for minor and adult children to make sure your hard-earned money is used in a smart way for your children’s future.

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For more information about the Family Trust or Living Trust see our short guide, Understanding Living Trusts by Miami Trust attorney Phil Rarick or contact our office at (305) 709-2858 for a consultation.

Notice: This article is intended for informational purposes only. It is important you consult with an experienced Miami Trust attorney. For more information contact attorney Phil Rarick at (305) 709-2858 or by email prarick@raricklaw.com.

Keeping Peace in The Family: 5 Common Pitfalls

Rarick Trusts & Wills Law, P.A. — Thu, 12 Sep 2024 13:00:48 GMT

Keeping Peace in The Family: 5 Common Pitfalls By Attorney Phil Rarick, Weston Estate Planning Attorney

As an estate planning attorney, I sometimes witness stressful family fights that break out upon the death of a father or mother or husband and wife. On some occasions, it’s outright family warfare! What is painful is that the family was functioning quite well before the passing of their family member. Here are five common pitfalls to avoid:

1. No Plan For The Inevitabilities of Life

Over 67% of Americans do not have an estate plan. Over 87% of Americans will suffer a mental disability prior to death. 100% of Americans will eventually die and leave this earth for a better place. These three basic statistics should make anyone pause. Failure to plan for these existential human events is simply ignoring the realities of life. The absence of clear, legally binding instructions and plans for how family assets should be held or distributed is an invitation to costly litigation. Some persons have the attitude, “Well, I won’t be here; what do I care.” This attitude is thankfully rare, but it is almost always in direct contradiction of the father or mother’s values to provide the best future for their children – or grandchildren.

2. Outdated Estate Plans

Life is dynamic, and changes such as marriage, divorce, or the birth of children necessitate updates to your estate documents. Failure to revise your will or trust to reflect these changes can lead to confusion and disputes among heirs. Regularly reviewing and updating your estate plan ensures it accurately reflects your current wishes and family structure, minimizing potential conflicts. When was the last time you reviewed your trust or will? Apply the 3-year rule: if it has been more than 3 years since you reviewed your trust and/or will plan with your estate planning attorney it is time to give your attorney a call.

3. Trying to Do It Yourself

While it might be tempting to draft your own will or trust to save on legal fees, this approach almost always causes more costs than it saves. It is an invitation to legal challenge. Complex laws control the validity and interpretation of trusts and wills. A good trust must be written with clarity and flexibility for the uncertain future. This will sound self-serving coming from a Florida trust attorney – but you need an experienced Florida trust attorney to draft your estate planning instruments that will withstand legal challenges.

4. Thinking Verbal Instructions Are Legally Binding

Under Florida law (and in every state of the Union) verbal promises or informal agreements regarding the distribution of your assets are not legally binding. Telling your daughter you want her to have your diamond ring has no legal authority. Advise your trust attorney that you want this wish included in your estate plan.

5. No Plan for the Loss of the Family Matriarch or Patriarch

Family warfare can be especially stressful upon the death of the family matriarch or patriarch who, during life, kept the peace in the family and helped resolve family disputes. When this parent passes away, unresolved issues related to who gets what and when can lead to family disputes. The answer: establishing a clear and comprehensive trust with detailed, legally binding instructions that will control and guide the family after death. Having a peaceful, grateful, and cohesive family is a great legacy to leave – and most would say far more lasting than a purely monetary legacy.

Conclusion

The above comments reflect over 30 years of experience as a trust attorney and more years as a husband and father of three adult children and two grandsons. We are here to help you avoid these pitfalls of life and have peace of mind for you and your family with forward-looking estate planning.