As unhappy as it can be to think about the end of your life, making preparations can save your family from much of the worry and stress that can be associated with settling your estate after death.
One of the options available to protect and provide assets for your loved ones after your death is a Trust.
Why Use a Trust?
As a good rule of thumb, if your assets total over $100,000, it is worth creating a trust for your children and loved ones. A trust is essentially a place where all of your net worth is “stored” and administered based upon the terms of the Trust.
Trusts, like wills, are created while you are still alive, and can be updated as often as you like. It is important do remember to do this if you go through life changes such as the birth of a new child or a divorce.
An estate planning attorney with experience setting up trusts will be able to talk to you about the various options available to you in your particular situation, as well as providing recommendations. Depending on the type of trust you create, there are a variety of benefits for your loved ones.
Tax Benefits. If you have a large estate, setting up a trust or trusts can be used as a tool to lower the impact of estate taxes. .
Administering Life Insurance Proceeds. A special Trust can be created to hold life insurance policies which can then be administered for the benefit of your beneficiaries after your death according to your wishes. These trusts can also provide certain tax benefits.
Skipping probate. Probate is a legal process that transfers title to assets held in the sole name of the decedent upon death. This process is controlled by the Court and can take several months. In addition, there are fees associated with the process that will be paid from the assets of the estate. Assets in trusts don’t have to go through probate and in some cases are available to the beneficiaries in a shorter period of time than assets that must pass through probate before eventual distribution to the beneficiaries.
Provide for younger beneficiaries and those with special needs . Being able to manage large sums of money takes skill, responsibility, and maturity. Younger beneficiaries of your estate can benefit from a Trust which designates distributions at a certain age or time and can also designate specific uses for the distributions, such as for education, health or maintenance. If your beneficiaries have special needs and/or receive certain government benefits, it may be important that their inheritance be set aside in a Trust in order to avoid disqualifying them for benefits.
Set assets aside for specific purposes. You can set aside money that is only to be used for educational purposes ; to take care of property; or to care for a beloved pet. You can also leave a specific portion of your assets to charity. If you have a clear vision for how you want your assets to be used, trusts can help make this a reality.
While setting up a trust may seem simple, it’s a complex document that requires the drafter have a proper understanding of Florida trust law. Consult with an estate planning attorney who can assist you in evaluating your assets and your desires regarding beneficiaries and advise you as to the most advantageous plan for your estate.
If you have been appointed Trustee of a Trust you have certain duties to the beneficiaries of that Trust under Florida Law. These duties are not always specified in the Trust document. Moreover, failure to adhere to the law can put you at risk of lawsuits by the beneficiaries against you personally. A knowledgeable probate attorney can advise you of your duties and ensure that you comply with the law in administering the Trust. Call Wintter Law today for a consultation.