Trusts can be a great tool for estate planning. In a trust, one party puts assets into an instrument that a trustee manages. This individual looks after the funds until they pass to a beneficiary. In Florida, almost anyone can be a trustee as long as he or she is an adult of sound mind. A corporation, like a bank, can also act as a trustee. So can a professional, like a lawyer. In some cases, testators choose a family member or friend to be a trustee.
How Revocable Trusts Work
Revocable trusts are instruments that allow people to pass assets on to their families quickly upon their death. After the creator’s death, funds in the trust don’t have to go through the process of probate. They can pass to the heirs quickly. Sometimes, people talk about tax benefits in association with revocable trusts. This is a complicated issue and should be discussed with an accountant.
A Trustee’s Duties
Being a trustee is a big responsibility. Trustees must invest and account for the funds entrusted to them. Upon the death of the trustor who created the revocable trust, they are responsible for paying taxes and expenses. Then they must make distributions to the heirs according to the wishes of the trustor.
During the time a trustee manages assets, he or she must deal with taxes. He or she also must communicate clearly with other involved parties, like beneficiaries. It can be a good idea to consider hiring a professional as a trustee. An attorney understands the fiduciary duties required of a trustee. A lawyer may also be able to provide advice about effective estate planning in general.