Ronald A. Jones, PA, Attorney at Law
Why living trusts don't avoid probate in Florida
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Why Living Trusts Don't Avoid Probate in Florida
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Why don't you suggest living trusts to avoid probate?

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.

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Ronald A. Jones, PA, 15600 A S US Hwy 441 Summerfield FL (352) 347-2288