Q. My father is a widow, lives in Florida and wants to leave his house to me and my brother. The title of the home was transferred to him after the death of his wife. He want to keep the home in his own name because he receives a tax credit. Would it be best for him to create a living trust for me and my brother? Would doing this avoid probate and costs?
A. We’re glad you’re considering these options while your father is alive and able to act, assuming he’s on board with new ideas. But because your dad lives in Florida, you’re going to need to speak to an attorney in that state.
But generally, a living trust is a legal document created by an individual, known as the grantor, during the individual’s lifetime, said Shirley Whitenack, an estate planning attorney with Schenck, Price, Smith & King in Florham Park.
“The living trust sets forth the disposition of the assets during the grantor’s lifetime and after the grantor dies,” she said.
Whitenack said the trust is managed by a trustee who often is the grantor during his or her life, and a successor trustee is usually designated to carry out the terms of the trust upon the incapacity or death of the initial trustee.
Then, the trust provides for beneficiaries upon the death of the grantor, who usually is a lifetime beneficiary.
Whitenack said living trusts are often created in states where probate is costly and time-consuming.
“The question of whether the father’s house should be placed in a living trust should be answered by a Florida attorney because of Florida law pertaining to the transfer of homesteads into revocable living trusts and the time period for creditors to file claims upon the death of the father when a will is not probated,” Whitenack said.
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