The most basic estate planning option is a will since it can cover everything from guardianship designations to the distribution of your overall estate. Yet, wills are not always the most ideal solution when planning for your estate. One main reason that a will may not be ideal is because in order to rely on it for the distribution of your estate it will first have to be admitted to the probate court so a judge can affirm its validity. Secondly, you will not be able to shield your loved ones from potential creditors of your estate, expensive attorneys’ fees and the court fees associated with processing your estate.
Such realities make trusts an ideal solution for many individuals, families, and businesses when wanting an estate plan that not only protects their assets but ensures a smooth transition of property for survivors. There are many reasons you need to set up a trust, and we have listed some of them below.
Trusts are legal entities that enable an individual to set up an agreement that names individuals or companies as the trustee of the specified assets named within its provisions. There are many different types of trusts, the most popular being:
This type of trust allows the grantor (owner) to modify or revoke the agreement at any time. These are a popular option for younger individuals and families since they experience many milestones throughout their lifetime, like having a child or getting divorced. One can also continue to benefit from the assets held by the trust until they die, at which time the remaining assets get distributed as directed by its provisions.
This type is the exact opposite of a revocable trust and takes away ownership of the assets it holds. Once created, it cannot be revoked or modified, but this can prove useful when trying to protect eligibility for certain government programs that have a look-back period.
Florida Medicaid/Medicare laws are complex. If you need long-term care facility assistance or plan to apply for such benefits, it is critical to avoid jeopardizing your eligibility for those programs. Irrevocable trusts shield your income and assets that exceed income and asset limit qualification guidelines. Consulting with an experienced Florida estate attorney that has in-depth knowledge regarding retirement planning will prove invaluable.
Continuing to provide financial support for disabled loved ones after you pass away is probably something that weighs heavily on your mind. Certain types of trusts can support them while avoiding disqualifying them from critical benefits programs like Medicaid or Supplemental Security Income, which have strict income limits. Even better, you can also set up contingencies if you should become disabled and want your spouse to manage your assets in a trust set up for your care.
Estate taxes, while non-existent on the state level in Florida, are an issue for those who have significant assets exceeding federal limits. Currently, there is an estate gift tax exemption of up to $11.7 million per individual, $23.4 million per couple in 2021. Living trusts can help minimize this tax exposure.
In today’s world, many families are blended, meaning one or both parents have been previously married and have children from those relationships. This situation increases the risk for asset disputes between the spouses and children left behind when we pass away. To avoid instances of conflict between your surviving family, using a living trust with specific contingencies and directions for distributing your assets is ideal.
Trusts aren’t just for individuals and families, but also businesses can be safeguarded for years to come with careful planning. Many situations can arise when running a company, including suffering the loss of a partner, co-owner, or key personnel you rely on to conduct your day to day operations. Business succession planning can help ensure their loss does not lead to related hardships like financial losses or business closures.
It also helps to head off any in-fighting between stakeholders or your family because you appoint a successor and leave instructions for how your business should continue in your absence. These situations can be extremely complicated and require a highly-trained estate planning attorney who has extensive business law knowledge, like those at The Legacy Law Firm.
The most basic reason you need to set up a trust is that it provides a flexible approach to estate planning. Our lifetimes will be full of major milestones and challenges, from graduating college and getting married to having a child or planning our retirement, the value a trust brings to our estates is immeasurable.
While trusts are ideal for asset management and protection, they are also critical in making our passing less burdensome on those we leave behind. By shielding them from drawn-out and expensive probate proceedings and leaving clear instructions on what our preferences are for our estates, we help create a lasting legacy they will cherish.
When weighing all of the available options available to create a comprehensive Florida estate plan, setting up a trust should be at the top of your list. With the many different types of customizable trusts to meet your needs, consulting with an experienced estate planning attorney is the best first step you can take when starting the process.
We can help you make informed decisions to ensure you avoid common pitfalls that can subject your loved ones to drawn-out court proceedings and contestations that are costly and delay disbursements. Call us today at (954) 999-9683 or contact us online to discuss your unique situation, learn more, and get started.
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