4 Types of Trusts to Consider in Your Florida Estate Plan
Trusts can play an important role in anyone’s estate plan, regardless of your financial net worth. Even individuals with moderate wealth want to seek certain objectives and deal with circumstances that a will alone cannot properly address. A recent article published by Forbes describes some of the goals that trusts can help you achieve as part of your estate plan, including avoiding probate, protecting privacy, and providing for beneficiaries.
However, the term “trust” is quite broad, covering the larger umbrella of revocable and irrevocable as well as the specific subclassifications. A Dade City trusts lawyer can offer personalized advice based upon your unique needs, but an overview of five common types of trusts may be informative.
- Revocable Living Trust: You can create, fund, and manage trust assets during your lifetime, for your own needs as beneficiary, through this type of trust – which by definition is therefore revocable. One of the primary goals of a living trust is avoiding probate through use of a pour over will that transfers everything you own into the trust, if you have not done it already. When you own nothing, there is no estate to administer.
- Special Needs Trust: If you want to plan for the needs of an individual with special needs, you can do so through this trust. By including the proper language and following legal requirements, it is possible to provide funds to the person without impacting his or her eligibility for public benefits.
- Asset Protection Trust: When one of your estate planning goals is safeguarding property from creditors, you may be able to legally do so through an asset protection trust. By transferring real estate and/or personal items in the trust, you do not officially own them; a creditor would have no claim against the trust as a separate entity.
However, there are numerous pitfalls associated with these arrangements. You could run into allegations of fraud through transfers of assets, and there are loopholes through which a creditor could still gain access to your assets.
- Spendthrift Trust: Many people have a loved one in their lives who makes questionable financial choices or is unprepared to make wise economic decisions due to age. It is possible to provide for such an individual AND still protect your assets through a spendthrift trust. With the proper language, you can limit distributions of trust income and principle or base them upon reaching age milestones. You can also prohibit the beneficiary from encumbering assets or pledging them to secure debts.
Get Additional Details from a Florida Trusts and Estate Planning Attorney
For a more in-depth description of the types of trusts that you might consider as part of your estate plan, please contact The Law Office of Laurie R. Chane in Dade City, FL. You can set up a consultation by calling 352-567-0055 or filling out our online contact form. Our team advises clients throughout Pasco County on wills, trusts, and other components of a well-developed estate plan.