In Florida, a number of attorneys and even some non attorneys suggest the use of living trusts. While living trusts can
be useful, particularly when it comes to having someone manage your affairs if you are unable to, frequently living trusts
do not in fact avoid probate.
The theory behind a living trust is that you create this artificial entity, called a trust, which has an independent existence.
You transfer all of your property into the trust, the trust now owns all of your property and you name yourself as trustee,
and you also provide that upon your death someone new, typically a child or a spouse, will step in and be the new, or 'successor'
trustee. The successor trustee is supposed to manage the property and after your death, distribute the property to who you
want it to go to. It is supposed to escape probate under the theory that because you, individually, do not own property but
your property is owned by your trust, after your death the trust continues, the successor trustee steps in and does what he
or she has to with the property; thus, there is no need to probate an estate, because there are few or no estate assets to
probate- all of the estate assets are in the trust and pass outside of probate.
That, in and of itself, is fine. The problem is that Florida law provides that revocable trust is liable for the estate
debts of the decedent; and there is a 2 year statute of nonclaim. In other words, if someone dies with a revocable trust,
at least theoretically the trust is on the hook for 2 years after the person dies for any debts or claims against the person
who died, and if the trustee distributes, or passes out the money to the beneficiaries before the 2 years is up, and that
results in the trust not having the money to pay creditors, the trustee is liable to the creditors until the 2 years is up.
However, there is an exception to this: if a probate is brought, and the estate is advertised, then the period the trust is
liable is limited to 3 months after the first date of the advertisement of the estate. From a practical viewpoint, it makes
a great deal of sense to bring a probate, and to close out creditors claims to 3 months after the advertisement, at least
if there aren't a lot of bills to pay. Otherwise, the successor trustee would be very foolish to pay the beneficiaries if
the trustee might be on the hook for 2 years. So, from a practical viewpoint, most, if not nearly all, revocable trusts in
Florida wind up having a probate brought in order to close out creditors claims before the 2 years are up.
If a probate is going to be brought to close out creditors claims, then there is not much point to a revocable trust for
the sake of avoiding probate.