Like most Americans, West Palm Beach residents probably consider their homes one of the most valuable assets they own. Our homes often represent our most significant financial assets, but they also tend to represent a deep personal and emotional investment. The investment we put into our homes should be reflected by our efforts to pass them on to heirs in the best fashion possible. In order to achieve that goal, Floridians may want to consider one of the many uses of revocable trusts.
A revocable trust offers a flexible estate planning option because it can be revised at any time during one's life. The trust's terms become permanent upon death, and assets held by the trust will pass on to beneficiaries without having to go through the process of probate administration.
One form of revocable trust, commonly known as a legacy trust, presents a popular option for cherished family properties such as vacation homes. The legacy provisions of the trust can grant a trustee broad discretion over the administration of the property or can provide very specific instructions, such as rules for deciding how to share time among family members and guidelines for allocating maintenance funds.
Another version of the revocable trust can be used to help avoid disputes among heirs over the division of real property. A common form grants use of the property to a surviving spouse for life. It also instructs the trustee to sell the property after the spouse's death and divide the proceeds among heirs. In the alternative, proceeds can be gifted to a favored charity.
Perhaps the most flexible version of the revocable trust gives beneficiaries first rights to buy out other beneficiaries' interests in trust property. The purchase option can be an effective way to equalize property distribution when one beneficiary has a strong personal interest in the property.
Revocable trusts offer a high degree of flexibility, along with certain opportunities to recognize estate tax benefits. A well drafted trust can provide Floridians with valuable peace of mind when it comes to passing on a cherished home.
Source: U.S. News & World Report, "4 Ways to Include a Home in Your Estate Plans," Philip Moeller, Aug. 14, 2012