What is the difference (if any) between a Family Trust and a Living Trust? Are they the same?

Asked over 3 years ago - Orlando, FL

Can the grantor of the trust, trustee and beneficiary be the same person? Is there a process or requirement to register a trust in the State of Florida? I am looking into putting a distressed asset into a trust for an investment.

Attorney answers (3)

  1. Dan W. Armstrong

    Contributor Level 14

    1

    Lawyer agrees

    1

    Answered . They can be the same and many times they are. You must look at the language in the trust document to be sure. The trust is an enormously flexible vehicle for all kinds of legal maneuvers. In the typical “revocable living trust”, the settler (one who makes a trust) appoints himself as trustee until his death, disability, or resignation, and then appoints a successor trustee or trustees to manage trust property and dispose of it by giving the settler the use of the property during his period of disability, and then distributing it to the settlor’s successor beneficiaries. Some non-tax benefits include:
    1. avoidance of probate delays and expenses;
    2. opportunity for processional asset management;
    3. permit distribution over time (probate without a testamentary trust requires immediate distribution to all adults);
    4. minimize risk of multiple inheritance taxes by having the real estate and personal property held in one Florida trust;
    5. prompt transfer of management of assets at disability;
    6. avoidance of publicity;
    7. insulation from pleas for money (“Fred, I’d lend you the money, but it’s tied up in trust”);
    8. avoidance of mental blocks about signing wills;
    9. avoidance of guardianship;
    10. reduce the likelihood of will contests;
    11. restrict the wasting of assets by spendthrift beneficiaries and their creditors; and
    12. avoidance of surviving spouse deviating from predeceased spouse’s estate plant.
    On occasion, the goal of avoiding probate is accomplished by a method simpler and less expensive than a living trust. After the trust declaration is executed, you still must transfer the assets into the name of the trustee. Again, by transferring the asset during one’s lifetime, to a trustee (even oneself as trustee) one avoid probate of that asset. Many people prepare elaborate living trusts, but improperly fund the trust by failing to put all appropriate assets into the name of the trustee, thereby not implementing what was intended.
    A corporate trustee would probably charge around one percent of principal per year as the trustee’s fee. Corporate trustees are held to a higher standard of care than an individual trustee, and for many reasons, the peace of mind created with a professional independent, impartial, experienced, fully insured, fully regulated corporate trustee may be well worth the expense. For example, suppose your child is trustee for the benefit of your grandchild. If the trustee does not invest the money wisely, is the grandchild really going to sue the parent for negligence or breach of fiduciary duty?
    This article is written with the hope that you will contact your attorney, accountant, and other advisers, to discuss these matters in more detail. Estate planning is a constantly changing field, rife with loopholes and potholes. Please understand that the scope of this article is general in nature, and should not be used as a basis to plan your estate matters without professional assistance. Each of us is unique, and the use of “do-it-yourself” estate planning or the use of a “will kit” is not much different from “do-it-yourself” hospital surgery.


    See an elder law attorney since this subject can be complex and other issues are created that you might require further information. My website below may have articles that may further be of interest to you on this subject. If you think this post was helpful, please check the thumbs up (helpful) tab below. Thank you!
    My comments are not intended to establish an attorney-client relationship, are not confidential, and are not intended to constitute legal advice. Proper legal advice can only be given by an attorney who agrees to represent you, who reviews the facts of your specific case, who does not have a conflict of interest preventing the representation, and who is licensed as an attorney in the state where the law applies.

    Dan W. Armstrong, Attorney
    Law Offices of Dan W. Armstrong, P.A.
    P.O. Box 1535
    Ponte Vedra Beach, FL 32

  2. Mohammad Ahmed Faruqui

    Contributor Level 11

    Answered . They're usually the same.

  3. Roy Wayne Litherland

    Pro

    Contributor Level 11

    Answered . A number of names are used to referred to revocable living trusts includng the terms family trust and inter vivos trust, all of which generally refer to the same type of trust set up.

    Normally the trustor who creates the trust is also the trustee and the beneficiary with anything else being used rately.

    You need to address your question about Florida law to an attorney licensed and practicing in Florida. And I can't think of any reason why you want to put a distressed asset into a trust for an investment; i fail to see any immediate legal advantage for doing so, and certainly doing so isn't going to shelter you from any liability associated with the asset.

Can't find what you're looking for? Ask a Lawyer

Get free answers from experienced attorneys.

 

Ask now

28,864 answers this week

3,055 attorneys answering

Ask a Lawyer

Get answers from top-rated lawyers.

  • It's FREE
  • It's easy
  • It's anonymous

28,864 answers this week

3,055 attorneys answering