What is a revocable (aka living) trust? It is a trust fund that the maker can modify to meet their current or changing needs. A revocable trust is flexible, often bypasses probate, and keeps your financial matters private. Upon death, the trust will automatically become irrevocable or unchangeable.
Unfortunately, this type of trust does pose a few drawbacks that Florida residents should consider. When armed with accurate information, you have good odds of choosing the trust (revocable or irrevocable) that serves you best.
Little protection from taxes
Revocable trusts do not offer much in the way of preventing tax burdens on your estate. Most people look to irrevocable trusts for tax protection when estate taxes are a top concern. Always investigate the tax laws in your region to make wise estate planning decisions.
Creditors can seize assets
Your creditors can access the assets held in a revocable trust while you are alive. If falling behind with creditors is even a minor concern, consider other estate planning options that provide similar benefits but protect your assets from creditors.
Requires ongoing maintenance
All estate plans generally benefit from regular reviews and updates regardless of what they contain. When you have a revocable trust, this becomes even more critical. The terms of your trust will not change on their own to account for births, deaths and other important events. That means it falls on you to ensure the document remains current.
A revocable trust might be what you need to round out your estate plan. Just be certain you understand its limitations as well as its rewards. Often, guidance from someone familiar with Florida estate planning laws can empower you to make well-informed decisions.