Creating a Florida family trust is a great way to provide for your family members after your passing, and helps avoid the delays, costs, and potential drama of probate court, while also allowing the grantor of a trust to ensure that property goes toward specific purposes, such as education or health costs. But there are times in which it makes sense for the trust to be revoked (also referred to as “dissolved”). If the trust is a revocable trust, this is usually a simple process, and there may also be feasible ways to revoke an irrevocable trust. That said, you may be able to achieve your intended purpose by taking other actions short of revoking the trust.
REVOKING A REVOCABLE TRUST
As the name indicates, a revocable trust can be revoked by the grantor (the person who created and funded the trust) at any time in his or her life. First, it is important to transfer all of the assets out of the trust. You can work with your attorney to create a simple document indicating your present intent to dissolve the trust. You would then have that document signed and notarized and, if the original trust was filed with a court, the document would then be filed with that court as well.
REVOKING AN IRREVOCABLE TRUST
Despite its name, an irrevocable trust can be revoked, but, unlike a revocable trust, it will require some other reason than the grantor simply wanting to retrieve the funds. State law will dictate when an irrevocable trust can be revoked. In Florida, trusts that have been created since 2001 can be revoked with the consent of all beneficiaries of the trust.
In other cases, such a trust can be revoked when it is shown that the trust is no longer serving the intended purpose of the trust. For example, if a trust was set up to provide for health care costs for an beneficiary, and the beneficiary has passed, then the trust’s purpose is no longer being served and it may be dissolved. Trusts can also be terminated when the total assets are less than $50,000 or where the cost of administering the trust is too high to justify the trust’s purpose.
Speak with an estate planning attorney on steps to take in dissolving an irrevocable trust.
ALTERNATIVES TO REVOKING A TRUST
Many times, the issues that lead a grantor or beneficiary to want to dissolve a trust can be addressed in other ways short of dissolving the trust. Trusts can often be amended by the grantor to reflect new purposes or beneficiaries. If the issue is that a trustee is engaging in waste or fraud, then steps can be taken in the court to remove the trustee and appoint a new one. Finally, it is possible to create a new trust and simply transfer assets from the old trust to the new one.
CONTACT RYAN MYNARD TODAY ABOUT CREATING YOUR FLORIDA LIVING TRUST
To being the process of creating or updating a Florida living trust – or to speak about any estate planning questions or concerns you have – contact Florida estate planning attorney Ryan Mynard at +1-850-683-3940 today to get started.