Trust agreements, an integral component of strategic Florida estate planning, serve as a tool for managing assets during one’s life and efficiently passing them on after death. While Florida trusts provide numerous benefits, the decision of which assets to fund into a trust is not black and white. We want to delve into the pros and cons of placing assets into your Florida trust agreement and why seeking guidance from an experienced Florida estate planning attorney is paramount.
First, before diving into the advantages and disadvantages, it’s crucial to spotlight a recommendation for married couples in stable, long-standing marriages. We often advise such couples to own assets jointly as tenants by the entirety (TBE) while both are alive. If either spouse is sued individually and not jointly, then assets owned as TBE are not at risk and receive protection. In addition, the TBE approach ensures seamless transition of ownership to the surviving spouse upon the first spouse’s death. In many situations, only then is it advisable to fund the survivor’s trust. This strategy aims to maximize the asset protection benefits inherent to TBE, which might be lost if assets are shifted to a joint trust or separate trusts prematurely.
When it comes to the pros of funding assets into your Florida trust agreement, consider:
One of the most significant advantages of trust-funded assets is bypassing the often tedious and expensive probate process, ensuring a smoother transition of assets to beneficiaries. Note, though, that there are other ways of avoiding probate at the death of the first spouse to die, such as owning assets with your spouse as TBE.
Florida trust agreements are private documents, unlike Florida last will and testaments, which become public record once they are filed in accordance with the law following death. Funding assets into your Florida trust can help ensure the details of your assets remain confidential.
Should you become incapacitated, a properly structured Florida trust allows for the efficient management of your assets without court intervention. Your successor trustee can step in and follow your wishes for what you want through your trust.
Florida trusts can be tailored to specific needs, ensuring assets are distributed according to your wishes, be it stipulating age-based distributions to heirs or setting aside funds for specific purposes.
Florida trust agreements can be structured so as to minimize the impact of federal estate taxes upon the legacy that you leave your loved ones.
Despite all the pros involved, there can be cons of funding assets into your Florida trust agreement such as:
Funding and managing Florida trusts require meticulous attention to detail. Mistakes can undermine the trust’s objectives or even render it ineffective and thus may require court intervention.
Establishing and maintaining a Florida trust can be more expensive upfront than a simple Florida will, although the long-term benefits often outweigh these costs.
Certain assets, such as automobiles, boats, or RVs, are not typically recommended for trust funding. For one, their titles can be conveniently changed post-mortem without delving into probate. More importantly, placing these assets in trusts may present insurability challenges.
As mentioned, while TBE offers asset protection, transitioning assets into a joint or separate trust prematurely may strip away these protections.
While there’s a plethora of online resources and DIY solutions available, crafting and managing a Florida trust is a complex affair, best left to experienced legal professionals. Your legacy and the financial well-being of your heirs shouldn’t be left to chance or generic advice. Be wary of DIY planning options when you want to protect yourself, your family, and your legacy.
The decision to fund specific assets into your Florida trust agreement should be made judiciously, taking into account the intricacies of your financial situation, family dynamics, and long-term objectives. An experienced Florida estate planning attorney, who is well-versed in the nuances of trust agreements and the broader landscape of estate planning, can offer invaluable guidance. By making informed decisions today, you are securing peace of mind for tomorrow.
We know this article may raise more questions than it answers. Our estate planning law firm takes a very different approach from what you might have come to expect. Our goal is to create lifelong relationships with each of our clients, to guide and manage your legacy for the rest of your life. Please contact our offices in Stuart and in Palm City to learn more.
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
Written by: John Mangan, JD, MBA