Trusts Avoid Probate? We’re Debunking This Myth

If you’ve been researching estate planning in Florida, you might have encountered the notion that a Revocable Living Trust (RLT) is a guaranteed shield against probate. While RLTs offer numerous benefits, it’s crucial to dispel the misconception that they automatically safeguard your assets from probate proceedings.

Here’s the truth:

In Florida, a Revocable Living Trust is still liable for the debts of the Grantor(s), the individuals who created the RLT.⁠ This means that even if you have an RLT in place, your assets can be subject to creditor claims after your passing. These creditor claims can encompass various debts, ranging from mortgages and credit card balances to student loans.

Here’s where it gets interesting:

Creditors have a two-year window to file claims per Florida Statue 736.0505. When a creditor files a claim, it triggers the probate process. Consequently, a Revocable Living Trust can indeed be subject to probate proceedings. While the terms of the RLT and the identities of its beneficiaries remain confidential, the trust’s assets may still be vulnerable to creditor claims.⁠

But that’s not the end of the story.

If the successor of the trust, the individual responsible for managing your trust after your passing, distributes the trust’s assets before the two-year statute of limitations expires, it can lead to additional complexities. If the trust no longer possesses sufficient assets to cover your debts, the trustee and any beneficiaries who received

distributions from the trust may become personally liable for those debts until the two-year period has elapsed.⁠

So, where’s the disconnect when people claim that a trust avoids probate?

There is a minor exception to this rule. If probate is initiated, creditors are notified, and the estate is advertised, the RLT is only liable for debts for up to 90 days from the first date the estate was advertised.⁠

What does all of this mean for estate planning in Florida? It implies that many Florida estates ultimately undergo probate to expedite the property distribution process and address any creditors’ claims before the two-year period concludes.⁠

Given the frequent occurrence of RLTs going through probate in Florida due to this two-year waiting period, it becomes evident that establishing an RLT solely for the purpose of “probate avoidance” doesn’t always align with the reality of the legal landscape.⁠

The Verdict.

While Revocable Living Trusts offer advantages such as privacy and streamlined asset management, it’s essential to recognize that they may not provide absolute protection from probate or creditors in Florida. Effective estate planning entails creating a comprehensive plan that suits your individual circumstances and aligns with your objectives.

If you’re committed to maintaining a plan that is solid, accurate, and tailored to your needs, we encourage you to consider booking a consultation with our team at the Law Offices of Mark F. Moss. Our expertise can guide you through the intricacies of estate planning in Florida, ensuring that your legacy is safeguarded. Book your complimentary consultation today by calling 904-329-7242 or book a consultation here to get started.