Types of Trusts

There are numerous benefits of all types of trusts, however, perhaps the most beneficial of them is working with an attorney who knows the ins and outs of the civil legal system. An attorney can draft a trust document for you and determine which trust may prove most beneficial. Because of the number of responsibilities given to trust administrators, it may also prove useful to continue working with that attorney.

Why would someone want to create a trust?

There are actually quite a few reasons why someone might want to create a trust.

  • Privacy  – Assets held in a trust at death are generally not subject to disclosure in administration of the estate.
  • Smoother transition of wealth to beneficiaries – assets held in trust may avoid the time and expense of passing through probate. The time and expense saved can be significant in many cases.
  • Superior incapacity planning – In the event of incapacity of the grantor, or owner of the trust, if that person is also the initial trustee, it is a relatively simple process for the successor trustee to take over and begin to manage the assets.
  • Tax reasons – a trust might be created to reduce estate or income tax exposure or to take advantage of tax-free gifting opportunities.
  • Asset protection and wealth preservation – a trust might be created that, while primarily for estate planning purposes, has the added benefit of sheltering assets from creditor claims. Some types of trusts may provide this protection for the grantor. Just about any trust, if properly drafted, can provide significant protection for beneficiaries upon the death of the grantor.

How Most Types of Trusts Work Differently from Bank Accounts

A bank account is simply one type of financial asset that a trust may own. Trusts can own just about any type of asset, including business or partnership interests, real estate, investment accounts, and bank accounts. Once a bank account is titled in the name of the trust, meaning the trust is now the owner, the account would be managed and ultimately distributed to beneficiaries according to the terms of the trust.

Important Considerations Prior to Creating a Trust in Martin County

Before creating any trust, a person should look closely to make sure that the attorney they meet with possesses the credentials to properly draft a trust. Is that attorney considered a specialist or expert in the area of trusts, or is the attorney more of a generalist who practices in many different areas but may not necessarily have any particular expertise in trust law?

People should consider what type of law firm with which they wish to work. Is there a preference for a large firm with many attorneys? Or would a small firm that offers a more personal touch be a better fit? There are numerous benefits to Palm City trusts, but working with the right attorney can make all the difference.

How Martin County Trusts Are Differ From Types of Trusts in Other Jurisdictions

Martin County trusts should be drafted and administered in accordance with Florida Law, which differs in many cases from the laws of other states. For instance, the witnessing and execution requirements for trusts are not the same in all states. Massachusettes and Illinois, as examples, would allow a valid trust where there is a single witness. Florida, however, requires two witnesses in order to have a valid trust.

There Are Unique Benefits to Different Types of Trusts

Broadly speaking, there are two categories of trusts – revocable and irrevocable. Revocable trusts are widely used and are the most common type of trust. Revocable trusts are exceptionally useful vehicles for transitioning wealth to beneficiaries upon death while avoiding some of the onerous expenses of probate.

Irrevocable trusts, while less common, may also be useful. They are typically drafted either to protect assets or to accomplish specific tax objectives, such as freezing asset values to allow future asset appreciation to occur outside of a person’s estate, thereby making that appreciation exempt from estate tax.

There are quite a few types of irrevocable trusts that can be formed. These include QTIPs, QPRTs, CRTs, CRUTs, CLATs, CLUTs, GRATs, GRITs, ILITs, IDGTs, DAPTs, FAPTs, spendthrift trusts, bypass trusts, asset protection trusts, special needs trusts, marital trusts, minor’s trusts, credit shelter trusts, and dynasty trusts. For more information on the benefits of trusts, contact a Martin County attorney.

Why Working with an Attorney Is a Good Choice

People should choose to work with an attorney to create any type of trust. The risks of trying to DIY are quite significant. Subsequently, when it comes time to administer the trust – which, depending upon the type of trust, could begin immediately or might not begin until the incapacity or death of the grantor of the trust – the trustee should work with an attorney to ensure the trust is properly administered. In many cases, the attorney who drafted the trust is chosen for the administration work, which makes sense since that attorney would already be quite familiar with the client’s situation, wishes, family dynamics, and the trust itself. Contact an attorney in Martin County for more information on the benefits of Palm City trusts.

Law Offices of John Mangan, P.A.     Palm City – Stuart, FL

Do you question the need for attorney guidance with so many online resources? Because laws and regulations are complex, and because every person has a lot at risk, more people than ever are seeking professional guidance from an experienced, knowledgeable source. That helps explain the rapid growth of our firm. Whether you happened upon this website by accident or are one of the many referrals we receive from a nearly 15-year collection of satisfied clients, our staff can provide customized estate planning guidance for you. Call us. Our number: 1 (772) 218-0480

Author: John Mangan, JD, MBA
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