The Value of Establishing a Florida Trust in an Estate Plan
Estate planning also includes provisions for developing trusts in Florida. Trusts allow individuals to set aside money for specific people or charities while avoiding the long, drawn-out probate process. This process allows heirs and beneficiaries to receive intended inheritances much more quickly.
In general, a trust is created when a person or firm manages property or assets for another person’s benefit. The person or entity who manages the trust is known as the “trustee.” The trust is entrusted with making decisions in the person’s best interest which benefits from the trust, known as the beneficiary.
Trusts are advantageous because they provide the ability to place conditions on how and when your assets will be distributed when you die, reduce estate and gift taxes, and allow you to skip the lengthy and expensive probate process.
Types of Trust to Include in a Florida Estate Plan
What’s the difference between a Revocable and Irrevocable Trust?
A Revocable Trust is, by far, the most implemented trust type. The person who creates and funds the trust is known as the grantor and will typically act as the directing trustee during their lifetime. The grantor may undo the trust, change its terms, and move property and assets in and out of the trust’s ownership as they deem desirable. Revocable Trusts are designed to switch to an irrevocable trust upon the death of the grantor.
On the other hand, an Irrevocable Trust is legally binding on its date of designation and allows very few provisions for change. The trust grantor funds the Irrevocable Trust with property and assets, and the trust property is then under the care and control of the individual whom the grantor names as trustee. The grantor cannot change their mind and “undo” the trust. There are unique tax implications and other benefits to an Irrevocable Trust, including protecting a person’s home and savings from the high costs of long-term care. These benefits can make relinquishing control worthwhile.
What is a Living Trust?
Living Trusts help protect and manage the assets of those who cannot do so themselves due to age, illness, or disability. Many seniors assume that a will is the only protection they need. However, trusts are designed to safeguard the assets of the living, while the will only outlines what happens to a person’s assets when they pass away. Furthermore, wills must go before a probate court, and taxes must be paid on inheritances, while Living Trusts allow beneficiaries to avoid probate after their loved one’s passing.
To establish a Living Trust in Florida, the owner, or grantor, places assets within the trust. The grantor then appoints a trustee to manage it and names beneficiaries to receive the assets of the trust when the time comes.
Understanding a Florida Special Needs Trust
Special Needs Trusts are a class of trusts explicitly created to benefit those with physical and/or mental disabilities. These differ from the typical trust due to the special conditions that often need to be in place to accommodate the specific needs and lifestyle of the beneficiary of a Special Needs Trust. One of the critical features of a Special Needs Trust is that the assets in the trust will not be counted toward asset thresholds contained in government programs such as Supplemental Security Income (SSI) and Medicaid in Florida.
Even if you believe your loved one with special needs will never need government benefits, it is prudent to consider a special needs trust. Special Needs Trusts can provide for the unique and specific needs of the beneficiary in ways that other types of trusts cannot.
The many benefits that proper estate planning with a trust that can provide to your family. It is worth some thoughtful contemplation, legal counsel, and adequately drafted documents with an experienced Florida estate planning attorney.
The Law Office of Dana Bowie is here to help you and your loved ones understand Estate Planning, Elder Law, Probate, and Trusts at our Longwood, Florida law firm. We welcome you to contact us to learn more about how we can help meet your Estate Planning needs in Orange County, Seminole County, and surrounding Central Florida areas.