Creating a trust can be a powerful and effective means of transferring wealth to children and grandchildren. Even people of relatively modest means may transfer assets to a trust that could help reduce the taxes and other costs that their heirs or beneficiaries might shoulder otherwise.
Speaking with an experienced Martin County attorney is usually the first step in preparing your estate for the future. If you are considering or actively creating an estate plan, talk with a Palm City trusts lawyer about the type of trust that may be right for you.
A trust allows a person or entity known as a trustee to hold legal title to property and assets on behalf of others known as beneficiaries. The trustee has a fiduciary responsibility to manage the property in the trust in a way that benefits the beneficiaries. The person who creates the trust is known as a grantor or a settlor.
The grantor may create a trust while they are alive or have their trust created after their passing as part of their will. To be valid, the grantor must create a trust document that names a trustee and beneficiaries. The grantor must also sign the document in front of two witnesses, and it is generally advisable to have the signatures of the grantor and witnesses notarized.
After the trust is created, the grantor funds it by transferring ownership of assets and property into the trust’s name. In Martin County and throughout Florida, the state’s homestead laws may affect whether it would be beneficial for a grantor to transfer the title of their home to their trust. It is important in this case to speak with a Palm City trusts attorney to weigh your options.
There are dozens of unique types of trusts in Florida that may be useful in a person’s estate planning. While each of these trusts has its own characteristics, trusts are generally classified as either revocable or irrevocable.
A revocable trust, also known as an inter vivos trust, is created by the grantor during their lifetime and may be changed, altered, or revoked by the grantor at any time prior to their death or incapacity. Revocable trusts have the advantage of allowing the grantor to continue managing their assets as the trustee while they are alive. After their passing or incapacity, the new trustee may immediately take over the management of the trust property without having to wait for the probate process.
A grantor generally cannot change an irrevocable trust after its creation. Once the grantor funds the trust with property or assets, those assets cannot be removed except under the circumstances defined within the trust. Irrevocable trusts provide certain tax benefits and may keep assets protected from the creditors of the grantor or the beneficiaries.
While all trusts are either revocable or irrevocable, there are several major categories of trusts that can be useful for estate planning purposes. For example, minor children cannot generally own real estate or other types of property, so a grantor could set up a trust to hold property in their name until the children reach the age of majority.
Additionally, grantors who care for individuals with special needs may set up a trust that provides for a disabled individual’s care after the grantor’s death.
In a similar vein, grantors who are concerned with paying for long-term nursing home care often create Qualified Income Trusts or similar trusts that will reduce their total income and assets so that the grantor may qualify for Medicaid coverage.
Several types of trusts help grantors avoid, minimize, or delay estate taxes. These trusts can be especially useful for married couples who might otherwise have to pay high taxes upon their spouse’s death.
Finally, some types of irrevocable trusts may allow the grantor to preserve assets outside of the reach of their own future creditors or those of their beneficiaries. This type of planning, though, can be complex, and it is important to seek legal counsel. A qualified trusts lawyer in Palm City may help formulate any of these arrangements.
Creating a successful estate plan often requires help and advice from an attorney experienced with the various types of trusts used in Martin County and throughout Florida. If you believe that a trust might help you reach your financial goals, schedule an appointment to speak with a Palm City trusts lawyer as soon as possible.