Many people think they aren’t “rich” so they don’t need an estate plan. But, estate planning is not just for the wealthy and it is really important for everyone in Florida. Estate planning consists of Powers of Attorney, Wills – also known as the last will and testament, which are subject to probate and estate planning also consists of trusts, among other things. Trust are not subject to probate which is the legal process of transferring property ownership to a beneficiary.
Trusts sometimes seem very complicated, but they are not – especially when one considers how they may simplify life for your loved ones after you are gone.
As a brief lesson: a grantor is the person who originally creates the trust. This is the person or persons who determine the rules of the trust. A trust is considered its own legal entity. The grantor transfers property into the trust by changing the way property or assets are titled. The trust can benefit one or more people. A trust is managed according to the trust document, which is the set of rules set out in the trust documents by the grantor. The rules can address who the beneficiaries are and what ages the beneficiaries will receive distributions (the distributions can be spread out over time or a lump sum). The trust allows the grantor more control of their assets, even after they pass away.
Trusts can also set up pet trusts, to ensure your beloved furry child is taken care of if one predeceases their animals. A trust can also establish a special needs trust, which can be used to provide ongoing financial support to children or dependents with disabilities. Sometimes, trusts can protect assets if one may need Medicaid benefits in the future. Transferring assets into an irrevocable trust at the proper time can protect property and prevent a person from exhausting his or her life’s savings before qualifying. Asset protection trusts are also helpful for protecting assets from creditors.
The grantor can select whomever he or she wants as the trustee, and also controls what property is transferred into the trust. Once the final grantor passes away, a revocable trust becomes irrevocable and no changes can be made, ensuring the grantor’s wishes are followed. While the grantor is alive, the grantor can amend the trust rules and also the trust assets so long as the trust is a revocable trust.