Engaging with an experienced trust attorney in Florida is strongly recommended if you have goals that you would like to accomplish. Putting together a trust is only half of what you need to consider when evaluating the benefits of a trust structure. You will also need to properly fund the trust and this is an additional step that can be taken after you consult with your estate planning attorney about your personal goals and the assets that will be placed inside the trust.
The first important thing to remember is that there are many different types of trusts available to you. The two most popular are known as a revocable trust and an irrevocable trust.
Irrevocable Trusts and Estate Planning in Florida
An irrevocable trust is one of the most beneficial and powerful tools available to people throughout Florida to protect their hard-earned assets. As a crucial component of many Florida estate plans, an irrevocable trust is an asset protection tool that helps you plan for government program benefits like veterans and Medicaid benefits. The term, irrevocable, is a crucial component of this trust. These trusts cannot be changed or terminated after they are created. As the trust grantor or the person creating the trust, you will transfer your assets inside the trust and hand over your ownership rights to those assets.
The trust then is a written document between the trustee and you. The trustee is the person that you put in place to administer the trust. Many different people see the advantages of an irrevocable trust. You can sit down with an experienced Orlando estate planning attorney to identify whether or not this is right for your Florida estate. Irrevocable trusts have one significant advantage in that they can be personalized and written to achieve a broad range of different types of goals and objectives including:
- Establishing estate tax shelters.
- Passing your assets to beneficiaries without requiring probate.
- Providing for a very specific purpose for your children.
- Charitable estate planning.
- Allowing a disabled individual to put any number of assets in a special needs trust for their benefit, without blocking him or her from certain government benefits.
- Making a gift of property to the trust beneficiaries.
- Protecting your assets from the claims of creditors in the future.
- Avoiding guardianship proceedings in the event that you become cognitively or physically impaired and are no longer able to make choices for yourself.
A fully written irrevocable trust is a very powerful and meaningful way to protect your investments, assets and money. These assets cannot be accessed to pay for assisted living costs or paying a nursing home because the trust grantor doesn’t have direct access to control the assets. Unlike a revocable trust, an irrevocable trust does comply with all state and federal Medicaid requirements. It is a valid and legal tactic that can help to protect your assets from decimation by the expenses associated with long term care in a nursing home.
This will also enable you to get the financial support that you may desperately need during that time from Medicaid. It is important to realize that the language inside your irrevocable trust has a significant impact over whether or not this is classified as valid. A trust must be appropriately written with the clear language for the goals to be served the first time around. Careful planning and drafting is critical to ensure that your individual needs and goals are achieved.
A knowledgeable Orlando estate planning attorney can help you and a Florida irrevocable trust may be the right choice for you but it should always be discussed directly with an attorney who has extensive experience in this area. You’ll want to talk through your individual goals to figure out whether the irrevocable trust is the right tool for your individual benefit. If you are very clear about your estate plans and expect that these will not change over time, an irrevocable trust may be the strategy of choice for you.
Florida Revocable Trusts
A revocable trust is, at its very nature, very different from an irrevocable trust. This is a tool that is generated by a trust grantor to manage the assets over the course of their lifetime and to distribute any remaining assets upon the death of the creator. The individual who creates a trust is known as the settlor or the grantor. The person who is responsible for managing the assets inside the trust is the trustee. In a revocable trust, you can serve as the trustee or you might appoint another individual, such as a trust or bank company to serve as your trustee. The trust becomes revocable since you can terminate or modify the trust over your life so long as you do not become incapacitated. During the course of your lifetime, the trustee is responsible for managing as well as investing the property inside the trust. The vast majority of trust agreements are written based on your individual specifications and will allow the grantor to take out money or assets from the trust at any point in time and in any amount. If you were to become incapacitated, the trustee is eligible to manage your trust assets to pay your bills and to make critical investment decisions on your behalf. This can help to avoid the process of establishing a guardian for your property if you were to become incapacitated and is one of the leading reasons that people choose to use a revocable trust. After you pass away, the trustee is responsible for paying all taxes and claims and then distributing any assets still inside the trust to your beneficiaries as outlined in the trust agreement. The trustee has numerous different responsibilities at your death, which is why it is so important to appoint someone who is comfortable and confident in serving in this role. Your assets, such as real estate, bank accounts and investments, have to be formally transferred inside the trust before you pass away in order to receive maximum benefits from the trust itself. This is referred to as funding the trust and can be assisted by your Orlando estate planning attorney. This means that you are officially changing ownership of the assets such that they are property of the trust. Your Orlando estate planning lawyer can assist you with this. Assets that are never appropriately transferred into the trust could be subject to probate, which could defeat the entire purpose of putting together a revocable trust. Certain assets should not be transferred inside of a trust because of tax problems. You should always work with a network of professionals including your Florida estate planning attorney, a tax advisor, and your investment advisor to determine whether or not your assets are appropriate to be transferred inside the trust.
How Does Your Revocable Trust Avoid the Florida Probate Process?
A revocable trust can skip probate in Florida by changing the transfer of the assets during your life to a trustee. This eliminates the need for having to use FL’s probate process to make the official transfer after you pass away. The trustee maintains instant authority to handle the trust assets when the have been transferred into the trust appropriately.
No court appointment is necessary to carry out this role. The funding of a revocable trust is essential for avoiding probate successfully. Any person who does not fully fund their trust will require a probate administration for the non-trust assets as well as trust administration to distribute the assets in full. Since a revocable trust does not always entirely avoid probate, a pour over will, which can be generated by your Orlando estate planning attorney, may be necessary to transfer any assets into the trust after your death. Your stock certificate, deed, title and account statement should all make some reference to the trust or to you as the trustee.
This is necessary in order to verify that you have properly transferred the assets inside the trust. Your financial advisor and attorney can assist you with properly moving those assets inside your trust.
If a trust will maintain ownership over real estate, then the deed must be prepared by an experienced attorney. The attorney will consider the impact of title issues, existing mortgages, and any homestead restrictions that may be associated with that property. Florida’s trust law has no specific procedures associated with paying and identifying creditors at death. Creditors have a maximum of two years from the date of the decedent’s death to file any claims against the estate.
The trustee who takes over when you pass away may be reluctant to distribute any trust assets to your beneficiaries until they are fully satisfied that all claims have been addressed. However, two years is a long period of time for your beneficiaries to wait. Some clients might choose to open a probate estate in addition to trust administration to benefit from the probate claim process. Probate law limits the amount of time that creditors have to file claims against the estate since this is typically three months from the date of notice and can also provide access for objecting to claims.
Trust assets are not inherently protected from the claims of creditors. Over the course of your lifetime, the assets inside a revocable trust are treated as owned by you and subject to creditor claims as if you had them in your own personal name. If a trust asset stays in the trust after your death, the beneficiary interests, however, are protected from creditors via a spendthrift provision which you can put in a trust agreement. Your Orland estate planning attorney can help you to accomplish this goal and give you greater peace of mind that your trust fully reflects your needs.
Contact An Experienced Orlando Wills, Trusts & Estate Planning Attorney
It is important to understand all of your options when drafting a will, creating a trust or making plans for your estate. Speaking with an experienced Orlando estate planning attorney can help you reach your goals and give you peace of mind. Contact Frost Law today at (407) 670-5569 for a free consultation.