[Uphillputt330]

My wife and I now own a house here in the Villages as well as in Michigan and plan to, at least for the next several years, be snowbirds. We currently have wills but not living trusts. It is my understanding that, should something happen to one of us, the Florida home (at least while we are Michigan residents) would have to go through probate which may be expensive and time consuming. As we are thinking of selling, and replacing, our Michigan residence, I think the time might also be right to create living trusts.

Here is my question — does anyone have experience with the execution (after a spouses or close relative’s death?) of an out-of-state living trust ? If so, was the out-of-state living trust recognized in Florida so as to avoid probate? Does the living trust really need to be drafted by a Florida attorney or are living trusts drafted by out of state attorneys just as good? Thanks in advance for your input

[ficoguy]

Every state is different. NJ is the worst. Estate laws govern where you reside when you die, not where you own.

[retiredguy123]

A trust is different from a will in that a will needs to comply with the State law and often needs to be executed by a state probate court. But, a trust is a private document that can be executed by the named trustee without any involvement by a court. The only time a trust needs a court to get involved is when someone challenges the trust by suing the trustee. You probably need to consult with a lawyer, but, if your finances are relatively simple, I would try to avoid preparing a trust. Trusts are expensive, and often need to be updated when you buy or sell an asset. I doubt that you need a trust if your assets are simple and there are not a lot of heirs. Most assets can be transferred by setting them up as "payable on death". In Florida, real estate can be transferred automatically on death by having a joint title or by setting up a "lady bird" title. No trust or will needed for that.

By the way, I am a trustee for a trust that was prepared in Virginia by a deceased friend. I have been executing the terms of the trust for several years, and I have never had to get the trust validated or even looked at by a Florida court. That is because it is a private document, which is much different from a will, that can become a public document after death.

[manaboutown]

You could hold the deed in joint tenancy with right of survivorship (JTWROS). That way when one dies the other owns the property without any need to go through probate.

[gpk111]

Good post. I'd be interested in hearing from others about Revocable Living Trusts (RLT) in general. Leaving all properties to the spouse is easy. Do a normal 'sweetheart' will. Everything goes to the surviving spouse. Everyone does it.


I don't believe there are any probate considerations. I do know that the estate transfers free of any inheritance taxes.

A Revocable Living Trust can be useful in transferring property after both spouses die. It's easier, private, and avoids probate, even though there is some incremental cost over a will. Wills are often free, since there is a payday waiting for the lawyer upon death. With an RLT, most of the legal hassle is moved up front.

To your question about out of state real estate: Do the trust in Florida. Maybe even use a discount mill. We did. They do volume and we found little downside if you do your homework. PM me if you'd like more info.

Once the trust is established, title has to be transferred. Location of the property is irrelevant, but the title transfer has to be clean, so it may require a local attorney. Real estate is the main asset in our trust. Other assets (bank accounts, brokerage accounts, life insurance, annuities) can be transferred directly and do not necessarily have to be retitled. Just make sure the beneficiary information is correct.

[rjm1cc]

Florida will usually accept your estate type documents drawn in another state. The key is usually so best to ask an attorney that practices in Fl about your documents. My assumption is they will be ok. But a felon can not be your executor of your will. If you are a Fl residence a non blood person living in a state other than Fl can not be the executor. Also be sure your documents are witnessed according to Fl law.
For the home. Yes you will have probate in Fl if you are still a residence of your current state. The trust for just that assets could be a way to avoid it. If you are a Fl residence be sure the trust is titled so you get the homestead real-estate tax deductions and the liability protection. An inexperience attorney may not probably draw the trust so be careful. If your children will inherit the Fl home and your will says this you might have a simple probate but I would double check with a Fl attorney.

I

[retiredguy123]

Originally Posted by rjm1cc

Florida will usually accept your estate type documents drawn in another state. The key is usually so best to ask an attorney that practices in Fl about your documents. My assumption is they will be ok. But a felon can not be your executor of your will. If you are a Fl residence a non blood person living in a state other than Fl can not be the executor. Also be sure your documents are witnessed according to Fl law.
For the home. Yes you will have probate in Fl if you are still a residence of your current state. The trust for just that assets could be a way to avoid it. If you are a Fl residence be sure the trust is titled so you get the homestead real-estate tax deductions and the liability protection. An inexperience attorney may not probably draw the trust so be careful. If your children will inherit the Fl home and your will says this you might have a simple probate but I would double check with a Fl attorney.

I

I understand that Florida does not allow a house to be titled as "payable on death". But, you can accomplish essentially the same thing by preparing a "lady bird" real estate title. It will allow you to retain total control of your Florida house, including the ability to sell the house, if you want. Ownership will transfer directly to your children or other heir upon death without probate. So, it could avoid the necessity to go through probate just to transfer the house. I would suggest that you consider it, especially if the house is the only asset that may need to go through probate. If a house is transferred to an heir in a will, sometimes the estate needs to be probated to clear the title so the house can be sold by the heir. A title company may not accept an unprobated will to clear the title when doing a title search.

[gpk111]

Originally Posted by retiredguy123

I understand that Florida does not allow a house to be titled as "payable on death". But, you can accomplish essentially the same thing by preparing a "lady bird" real estate title. It will allow you to retain total control of your Florida house, including the ability to sell the house, if you want. Ownership will transfer directly to your children or other heir upon death without probate. So, it could avoid the necessity to go through probate just to transfer the house. I would suggest that you consider it, especially if the house is the only asset that may need to go through probate. If a house is transferred to an heir in a will, sometimes the estate needs to be probated to clear the title so the house can be sold by the heir. A title company may not accept an unprobated will to clear the title when doing a title search.

Take the case of the surviving spouse: the whole transferring process has been kicked down the road and the buck stops. A revocable living trust transfers title without probate from the surviving spouse to other beneficiaries. It sounds like the "lady bird trust" does the same thing. Can you please explain the difference?

[rjm1cc]

Agree the Lady Bird transactions can work. I basically know nothing about it other than it is an option. But I think you have to be careful so that if you want to sell the property the beneficiary does not have the ability to stop the sale. Remember you will still need an attorney and fees to pay if you do set up the Lady Bird. Also Fl might have a different name for this but the idea is the same.
You are correct that you might still have to go through probate due to a title insurance company wanting it.

[gpk111]

Originally Posted by rjm1cc

Agree the Lady Bird transactions can work. I basically know nothing about it other than it is an option. But I think you have to be careful so that if you want to sell the property the beneficiary does not have the ability to stop the sale. Remember you will still need an attorney and fees to pay if you do set up the Lady Bird. Also Fl might have a different name for this but the idea is the same.
You are correct that you might still have to go through probate due to a title insurance company wanting it.

Good discussion. 2 points to ponder:
1. The property transfer should not get complicated with title insurance as long as the title is aligned and changed to the trust.
2. Selling should not be a problem as long as the trust (whether it be a revocable living trust or a lady bird trust) is "revocable." By definition, the RLT is revocable. Don't know about the LBT.

[retiredguy123]

Originally Posted by gpk111

Take the case of the surviving spouse: the whole transferring process has been kicked down the road and the buck stops. A revocable living trust transfers title without probate from the surviving spouse to other beneficiaries. It sounds like the "lady bird trust" does the same thing. Can you please explain the difference?

The lady bird is a type of deed for the the property. It is not a trust. The advantage is that it is just a deed, and will potentially save money and time in lieu of paying a lawyer to set up a complicated trust for all of your assets.

When my mother died, I was her only heir and all of her property was held jointly by me and her, except for her house, which she had left to me in her will. So, I legally owned all of her property. But, I had to go to probate court, open an estate, advertise the estate, and wait six months before I could close the estate. The only reason I had to do this was because I could not sell the house. The title company would not transfer ownership to a buyer with just a will. They required a probated estate that legally transferred a clear title to me, even though I owned the house via the will. But, if she had a "lady bird" title, I would have received clear title to the house immediately upon her death and would not have needed to go through probate at all. I hope that makes sense.

[manaboutown]

"A lady bird deed (also called a ladybird deed or an enhanced life estate deed) is a special form of life estate deed that gives the owner continued control over the property until his or her death. Once the owner dies, the property is transferred automatically to new owners without the need for probate."

Lady Bird Deed | What is a Ladybird Deed?

[manaboutown]

Joint tenants with right of survivorship (JTWROS) is a type of ownership in which all joint owners have equal portions of ownership that are immediately allocated to remaining owners if one owner dies.

Joint Tenants With Rights of Survivorship

[retiredguy123]

Originally Posted by manaboutown

Joint tenants with right of survivorship (JTWROS) is a type of ownership in which all joint owners have equal portions of ownership that are immediately allocated to remaining owners if one owner dies.

Joint Tenants With Rights of Survivorship

I think that is a good idea for a husband and wife. But, it is not a good idea for a parent and child for several reasons.

1. If the child is in debt, a creditor could put a lien on the house.
2. You would need the child's permission to sell the house.
3. The child may have to pay capital gains tax when they sell the house, because they will not receive a stepped up cost basis when you die.
4. If they move in, you can't legally throw them out.

[manaboutown]

Originally Posted by retiredguy123

I think that is a good idea for a husband and wife. But, it is not a good idea for a parent and child for several reasons.

1. If the child is in debt, a creditor could put a lien on the house.
2. You would need the child's permission to sell the house.
3. The child may have to pay capital gains tax when they sell the house, because they will not receive a stepped up cost basis when you die.
4. If they move in, you can't legally throw them out.

All true.