Estate planning lets you decide how your assets will be distributed after death. It allows you to protect the people you care about, support causes that matter to you, and create trusts that protect your assets and your family’s future.
An estate plan also makes things easier for your family after your death. The Florida estate planning attorneys at The Law Offices of Travis R. Walker, P.A., can help you create an estate plan and determine which types of trusts are right for you.
Understanding Trusts
A trust establishes a relationship where a person or entity, called a trustee, holds and manages assets on behalf of beneficiaries. The specific purpose of a trust and how a beneficiary can access or use the assets depend on the type of trust and how you set it up. The person establishing the trust, known as the grantor, can place many different types of assets into the trust, including financial assets and personal property, such as real estate, jewelry, and artwork.
Types of Trusts for Estate Planning in Florida
Choosing the right type of trust is critical for estate planning in Florida. Trusts can protect assets, provide for family members, and allow your wishes to be fulfilled after you pass away.
Living Trusts
A grantor sets up a living trust during their lifetime. When the grantor dies, the assets can be distributed to the beneficiaries without passing through probate. A living trust can offer several benefits, including:
- Allowing you to retain control of assets during your lifetime
- Letting a successor, and not the courts, control your assets if you cannot
- Facilitating the distribution of assets after death
The Importance of Living Trusts in Florida Estate Planning
A living trust can help you streamline asset transfers after your death. When assets are distributed from a trust, they do not have to pass through probate, which can be time-consuming and expensive.
Testamentary Trust
The terms of your will set up your testamentary trust. Unlike a living trust, a testamentary trust goes into effect after your death. The assets in a testamentary trust can be distributed to the beneficiaries at specific milestones you set. For example, the parents of a young child might want assets to be held in a trust until the child reaches adulthood, gets married, or graduates from college. A testamentary trust:
- Keeps assets under the trustee’s control until the beneficiary reaches the predetermined milestone
- Prevents taxes from being taken out on distributed income
- Does not impact pension benefits for beneficiaries
The Importance of Testamentary Trusts in Florida Estate Planning
A testamentary trust can help control and protect assets after the grantor’s death. Families often use testamentary trusts when they have minor children who may not be mature enough to reasonably manage assets when the grantor dies.
Revocable Trust
Revocable trusts are living trusts and can provide the same benefits. The key advantage of a revocable trust is that the grantor can change or, as the name suggests, revoke the trust at any time.
The Importance of 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 Trusts
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
The Importance of 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
The Importance of 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
The Importance of 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.
Why Choose The Law Offices of Travis R. Walker for your estate planning needs?
At The Law Offices of Travis R. Walker, we help guide clients through the estate planning process with compassion and efficiency. We have decades of experience working with Florida estate planning laws and can help set up trusts to maximize benefits for you and your beneficiaries. We offer cost-effective estate planning solutions and personalized service to all our clients. Trust us to handle the following:
- Living wills
- Power of attorney
- Last will and testament
- Pet trusts
- Probate
- Trust planning, including living trusts, special needs trusts, and testamentary trusts
- Trust litigation
Contact the Law Offices of Travis R. Walker for Trust Planning Today
Planning for your end-of-life affairs is important to ensure your wishes are carried out, and your loved ones are cared for after your death. If you are ready to start the process, consider consulting with The Law Offices of Travis R. Walker for all your estate planning and will needs.
Our experienced attorneys can guide you through the process and help you create a comprehensive plan that meets your unique needs. Contact us today to schedule a consultation and take the first step toward peace of mind.
FAQ
What Are the Main Types of Trusts?
The main types of trusts include the following:
- Living trusts
- Testamentary trusts
- Charitable trusts
- Special needs trusts
- Revocable trusts
- Irrevocable trusts
What Is the Best Trust for Estate Planning?
Choosing the right type of trust for your estate planning needs means looking at your assets, what you want to protect, and your plans for your family. Consult The Law Offices of Travis R. Walker to determine whether a living, testamentary, or special needs trust is right for you.
What Is the Best Trust to Protect Assets?
An irrevocable trust can help protect assets from lawsuits brought against the grantor and can also be structured to reduce the income tax burden of either the grantor or beneficiaries.
What Are the Two Most Common Types of Trusts?
A living trust, which allows the grantor to continue managing assets until his death, and a testamentary trust, which establishes a trust after the grantor’s death, are the most common.
What Assets Should Not Be in a Trust?
Retirement assets and health savings accounts should not be placed in a trust, nor should physical cash.
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