Putting Trust Into Trusts: A Will May Not Always Fit Your Estate Planning Needs. A Trust Could Be A Better Option.

After years of hard work and saving, ensuring that your assets are thoughtfully and efficiently transferred to loved ones or charities is essential. Have you considered how a trust might help you achieve this important goal? Let’s break down what trusts are and how they can benefit you.

In straightforward terms, a trust is a legal document that outlines your wishes for how and when your assets, including cherished items, are passed down to your family or charitable organizations. However, the world of trusts can be a bit complicated, as it includes various types, terminology, structures, and tax implications.

To help you navigate this intricate landscape and determine which type of trust aligns with your goals, here’s a summary of the potential benefits, types, and terms associated with trusts.

Wills vs. Trusts: What’s the Difference?  

Wills provide guidance on how to distribute your assets after your passing. Trusts, on the other hand, are legal agreements that allow you to manage the transfer of your assets, either before or after your death. A key advantage of trusts is that assets held within them generally do not have to go through probate court. This means your beneficiaries can access their inheritances more quickly and easily. While some individuals may choose to only have a will, it’s often beneficial for those with a trust to also maintain a will to cover any assets not included in the trust.

Why Consider a Trust?  

Establishing a trust for estate planning can offer you peace of mind, knowing that your assets will be safeguarded and distributed according to your wishes. Although setting up a trust can be more time-consuming and expensive than drafting a will, the benefits are numerous, including:

Avoiding Probate

 This simplifies and accelerates the distribution of your assets.

Greater Flexibility and Control

You can specify not only who receives your assets but also how they are distributed (e.g., over time or at someone else's discretion).

Minimizing Conflict

Trust instructions are generally not open to court challenges like wills can be.

Privacy

Trusts help keep your assets out of the public record that accompanies the probate process.

Asset Protection

They can shield your assets from creditors and lawsuits.

Tax Benefits

Certain trusts can help reduce estate, gift, or income taxes.

If you have questions about trusts, wills, or probate in Florida; the best course of action is to contact a legal professional. Olivia S. Benson has been helping families and individuals to navigate the estate planning process for over thirty years. Call the Offices of Olivia S. Benson for a complimentary 15-minute consultation at 786-245-7746 or request a consultation at officesoliviabenson.com.

Living Trust

A living trust is a great tool that you can establish while you're still alive. Once you pass away, your assets can be easily distributed to your chosen beneficiaries without the hassle of probate. Here are a few advantages of setting up a living trust: 

• You maintain control over your assets during your lifetime. 

• If you're unable to manage your assets, a designated successor can take over, leaving the courts out of it. 

• It streamlines the process of asset distribution after you're gone. 

Living Trusts in Florida Estate Planning

Creating a living trust is a smart way to simplify the transfer of your assets after you're gone. One of the biggest benefits is that assets held in a trust can avoid the probate process, making it quicker and more cost-effective for your loved ones. It's a thoughtful choice that can provide peace of mind for you and your family.

Testamentary Trust

The provisions in your will establish what’s known as a testamentary trust. Unlike a living trust, which is activated during your lifetime, a testamentary trust comes into play after you pass away. You can determine how and when the assets within the trust are distributed to your loved ones based on specific milestones you choose. 

• The trustee will manage the assets until the beneficiary reaches those important milestones you've set. 

• Distributions from the trust can benefit from favorable tax treatment, helping preserve more for your beneficiaries. 

• Plus, this arrangement won’t affect any pension benefits your beneficiaries may be entitled to. This way, you can feel confident that your wishes are honored and your loved ones are well taken care of!

Testamentary Trusts in Estate Planning in Florida 

Creating a testamentary trust is a wise way to manage and safeguard your assets after you pass away. These trusts are particularly valuable for families with minor children who may not yet have the maturity to handle financial matters responsibly. A testamentary trust can provide peace of mind, knowing that your loved ones will be taken care of in a structured manner when the time comes.

Revocable Trust

Revocable trusts are also known as living trusts, and they offer a range of benefits similar to those provided by other types of trusts. One of the main perks of a revocable trust is that the grantor has the flexibility to make changes or even revoke the trust entirely at any time. This adaptability makes it a great option for many people.

Revocable Trusts in Florida Estate Planning

Revocable trusts are simple to control and offer more flexibility than irrevocable trusts. That flexibility can make it easier to alter your estate plan if your preferences or circumstances change down the line.  

Irrevocable Trust

Irrevocable trusts are another type of living trust. Unlike revocable trusts, the grantor cannot remove assets once placed in an irrevocable trust. There are a couple of key benefits to irrevocable trusts, including: 

• Difficult to modify or dissolve, which means the grantor’s wishes will usually be honored

• Assets are no longer considered the grantor’s property, which can have financial planning and estate tax benefits 

• Avoids probate 

Irrevocable Trusts in Florida Estate Planning

Because assets placed in an irrevocable trust no longer belong to the grantor, they will not be included in the grantor’s taxable estate after death. Irrevocable trusts can also help grantors ensure they remain eligible to receive important government benefits, such as Medicaid.

Special Needs Trusts

Special needs trusts are established to care for individuals who cannot care for themselves, often due to physical or mental disabilities. These trusts do the following:

• Ensure individuals with special needs are cared for

• Protect family assets

• Prevent individuals with special needs from missing out on government benefits because of excess assets

Special Needs Trusts in Florida Estate Planning

Special needs trusts are usually set up to ensure the beneficiary remains eligible for government assistance. A special needs trust allows you to provide for a loved one’s care and well-being, including covering housing costs and other expenses, while preserving your loved one’s eligibility for the needed government benefits, such as Medicaid. 

A will is a good option if your affairs are relatively simple. For everything else, it’s best to go with comprehensive estate planning.

Charitable Trusts

A charitable trust establishes a trust with funds that can benefit the guarantor during their lifetime while allocating funds for charitable purposes. Benefits include the following:

• Charitable giving income tax credits

• Lack of capital gains tax when appreciated trust assets are sold

• Designated charities receive the funds or property 

Charitable Trusts in Florida Estate Planning

Charitable trusts can help you support causes important to you after you pass away. Charitable remainder trusts allow you to still receive income from the charitable trust during your lifetime. Depending on the type of charitable trust you set up, you may also receive a partial charitable deduction for your contributions to the trust.  

Creating a trust can be a bit more complex and time-consuming than just writing a will. But when it comes to ensuring that your wishes are honored and that those you care about – as well as the causes you support – are cared for in the way you envision, the effort can truly be worthwhile. To set up a trust, it’s important to find an experienced and knowledgeable estate planning attorney who can take you through the steps. To find out which type of trust is right for you, contact the Offices of Olivia S. Benson today at officesoliviabenson.com.