Effective estate planning requires you to keep all your options on the table. While the core of an estate plan may center around a traditional will, there are other choices that may serve your interests in much the same way but without many of the common drawbacks. In fact, writing a trust enables estate planners to avoid lengthy probate and help their heirs receive property at the correct time.
Our Fort Lauderdale trusts lawyer can help you to determine if this document is the right estate planning choice for you. Our trusts and estate attorney can explain the purpose of trusts, evaluate the benefits that they may bring, and draft documents in the necessary ways to bring the intended legal effect.
What is a Trust?
A trust is a type of fiduciary relationship where one party gives another party the right to hold onto titles to property or assets for the benefit of yet another party. The party which creates the trust is the trustor; we refer to the party holding the titles as the trustee; the final party is the beneficiary.
The purpose of creating a trust is to provide legal protection to the assets of the trustor. In addition to this, a trust can also help to ensure that assets are distributed according to the trustor’s wishes, reduce the amount of paperwork necessary for the distribution, or to reduce or even avoid inheritance taxes.
Each type of trust fits into one of the following categories:
- Living: A trust in which the assets are used for the individual’s use during their lifetime before transferring to their beneficiaries at the time of their death.
- Testamentary: A trust which focuses on how the assets will be designated after death.
Revocable: A trust which can be changed or terminated by the trustor during their life.
- Irrevocable: A trust which the trustor cannot change after establishment or which becomes irrevocable when they die.
- Funded: A trust which has assets placed into it by the trustor during their life.
- Unfunded: A trust which consists only of the trust agreement itself and lacks funding.
Skilled lawyer, Marc Brown, can explain how each of these trusts can be used to further your estate planning goals.
What Types of Trusts are Available in Fort Lauderdale?
There are many different types of trusts and so we’re going to focus on the five most common trusts that people set up here in Florida.
Setting up a trust can be a complicated process and picking the right trust for you can be quite challenging because there are a lot of laws and regulations to be considered, which is why working with trusted lawyer can make a world of difference. First, let us look at the five most common trusts here in Fort Lauderdale:
Land trusts are used to help keep asset ownership private for things like your family home so that they can’t become part of lawsuits filed against you. They can also help to prevent the property from entering into probate.
Revocable Living Trusts
Probably the most common trust in Florida. As the name suggests they are set up in your lifetime and available for use during the time, and they also allow for the trust to be amended or revoked. They are good for getting around the probate court system.
Irrevocable Living Trusts
Similar to the last but with the exception that they can’t be changed after being set up, an irrevocable living trust protects your beneficiaries from probate and estate taxes.
A type of trust that goes into effect upon your death, testamentary trusts are used to leave assets to a beneficiary but upon a set time period. For example, if you want to leave assets to your children but don’t want them to receive them until after their 18th birthday then a testamentary trust would be the way to go.
This type of trust that is used to ensure that your children will get an inheritance even if you end up having to spend a long time in a nursing home. It shelters assets so they cannot be taken to pay for the nursing home costs.
Why Include a Trust as Part of an Estate Plan?
The purpose of an estate plan is to protect your assets, both now and when you are ready to transfer it to a beneficiary. A trust allows you to designate a trustee to protect and maintain the property. That trustee must then distribute the property to the beneficiary at the appointed time.
Once you place property in a trust it is no longer your asset. This can bring substantial tax benefits as well as help you become eligible for government benefits such as Medicaid. Finally, a trust can serve as alternatives to will in that they may order the distribution of property when you pass away. This helps to shorten and simplify the probate process.
A dedicated attorney in Fort Lauderdale can evaluate your estate planning needs and explain why creating a trust might help to achieve those goals.
Legal Process Involved in Creating a Trust in Fort Lauderdale
A trust is a legal document that informs trustees and courts about the maker’s intent. Because of the vital role that trusts play in the estate planning process, state law is very specific concerning their creation and authentication.
Even so, there is no specific form that a trust must take. Florida Statute § 736.0401 states that a party creates a trust by merely having the intent to do so. A trust may provide for your child’s education, directly transfer ownership of property, or even endow a charity. As long as you name specific property, nominate a trustee to oversee the distribution, and name at least one beneficiary, a trust is created.
A knowledgeable lawyer can explain the legal effects of trusts and ensure their formation meets every relevant legal requirement.
Call a Fort Lauderdale Trusts Attorney Now
Moving property from one party to another can result in significant legal complications. Offering assets as a gift requires the receiver to pay heavy taxes. However, waiting for your death to transfer property through a will may leave the beneficiary unable to benefit from the property for years and lengthen the probate process.
Trusts are a valid way to address each of the concerns. Property that transfers through a trust avoids probate. Creating a trust can also achieve a transfer at any point in the future. This could help to support children, people with special needs, or charities. Reach out to a Fort Lauderdale trusts lawyer today to schedule an appointment to discuss your goals.