When you establish a trust, you create another entity. This is different from creating an entity such as a business. However, it is the most comprehensive and complete way that one can protect not only your assets but your loved ones as well. Unlike a will, trusts can avoid probate all together. This saves a lot of time and money in legal fees and any possible claims against the assets as the trust is also able to protect from creditors. The reason for this being that since trusts are entities of themselves, the assets placed within them transfer immediately upon death. Meaning they never actually pass-through probate. Anyone nominated as a beneficiary of the trust therefore has rights to the assets placed within, but they do not take possession of the assets, the trust does. Assets within the trust need not be dispersed to its beneficiaries but rather can remain within the trust indefinitely if one wishes.
There are many different forms of trusts. However, all trusts are going to be classified as either revocable or irrevocable trusts. The difference between a revocable and irrevocable trust is a revocable trust has the ability of being retracted at any time by the creator of the trust, and the assets still belong to the creator of the trust while they are alive. An irrevocable trust cannot be rescinded upon creation without a court order. Therefore, all items placed within the trust no longer belong to the creator of the trust.
Under Florida Statute 736.0402, there are several requirements that must be met for a trust to be valid:
For more information about trusts or the estate planning process please give us a call at 407-FIGHTER. We would love to help.
A few common trusts:
Heritage trusts are very common, they are a useful tool when there are concerns about family members inheriting a sum of money or assets. It is used to protect inheritance from others such as creditors, maybe other family members, or maybe even the beneficiaries themselves.
If you have a loved one that either has special needs or could have a special need in the future that may require government assistance, a special needs trust can protect them from being disqualified from public benefits, while still allowing them to receive their inheritance.
When dealing with items such as firearms it is often a good idea to place them into their own separate trust. This helps ensure that no laws are broken, or felonies committed during the passing down process after you have moved on. Also, the gun trust allows for the trustee to be in possession of, transport, and use your firearms at their will. It will protect your loved ones whether you have moved on or are still alive. The trust would also act as a shield to protect your possessions from becoming part of public record as they would avoid probate all together.
A Charitable trust allows for you to pass your estate to a charity of your choosing, this is often a great choice for those who might not necessarily have loved ones they wish to transfer their assets to. A charitable trust gives you the power to say where your estate goes at the end of the day.
An irrevocable trust is one which allows assets to be placed into the trust and remain there. They would become out of reach from all types of possible claims of ownership including yourself. This is also often used when dealing with certain agencies such as Medicare, Medicaid, and the VA. This is a great option when you would like to ensure that you are leaving a legacy behind for your loved ones. It protects from many forms of creditors and could possibly prevent your beneficiaries from having to pay extensive amounts in taxes on the increased value of assets during the time they remained within the trust. For more information about Irrevocable trusts, and how they may be able to benefit you call us at 407-FIGHTER.
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