When it comes to estate planning, individuals often consider creating trusts as an alternative or supplement to a traditional will. Trusts offer a range of benefits, including convenience, asset protection, and the ability to provide for specific circumstances or individuals. In Florida, trust structures are widely utilized, especially in situations where there is high net worth, out-of-state property ownership, minor children, financially irresponsible beneficiaries, or individuals with untrustworthy spouses. This article aims to shed light on the nature of trusts in Florida, their advantages over wills, and who can serve as a trustee. A common misconception that if you have only a will you can avoid probate.
Trusts Versus Wills
While both trusts and wills are estate planning tools, they differ in how they operate and distribute assets. A will outlines the distribution of property after a person’s death, while a trust allows for the management and distribution of assets during one’s lifetime and beyond. Trusts offer greater flexibility, privacy, and control compared to wills, making them an attractive option for many individuals. Anything properly in a trust (funds) avoids probate.
Reasons to Consider a Trust in Florida
- Convenience and High Net Worth: Trusts provide an efficient means of managing complex assets, such as multiple properties, investments, and business interests. They offer continuity of management and can minimize the need for probate, ensuring a smoother transition of assets upon the grantor’s passing.
- Out-of-State Property Ownership: If you own property in multiple states, establishing a trust can help streamline the administration of these assets and avoid the need for multiple probate proceedings. Trusts can be designed to hold and manage out-of-state properties effectively.
- Providing for Minor Children: Trusts allow for precise control over the distribution of assets to minor children. A trust can designate a trustee to manage and distribute assets on behalf of the children until they reach a specified age or milestone, ensuring their financial well-being and protection.
- Financially Irresponsible Beneficiaries: If you have a beneficiary who lacks financial responsibility, a trust can provide oversight and protect their inheritance. The trustee can manage the assets, ensuring they are used appropriately and in the best interests of the beneficiary.
- Beneficiaries with High Debts: Trusts can shield assets from creditors and help protect the inheritance of beneficiaries burdened by significant debts, such as medical or student loans. By structuring the trust appropriately, you can ensure that the assets are used for the intended purpose rather than being consumed by debt obligations.
- Beneficiaries with Disabilities: In Florida, a trust can be created to provide for beneficiaries with disabilities. This type of trust is often referred to as a special needs trust or a supplemental needs trust. The purpose of such a trust is to protect the assets intended for the beneficiary while ensuring that they can still qualify for government benefits, such as Medicaid or Supplemental Security Income (SSI). The trust assets can be used to enhance the beneficiary’s quality of life by providing for additional expenses not covered by public benefits. It’s important to consult with an attorney who specializes in estate planning or elder law to properly establish and administer a trust for beneficiaries with disabilities in Florida.
- Beneficiaries with Untrustworthy Spouses: A trust can safeguard assets from potential claims by a beneficiary’s untrustworthy spouse in the event of divorce or separation. By directing the assets into a trust, you can provide long-term protection for your beneficiaries, even in complex family dynamics.
Who Can Serve as a Trustee?
In Florida, the law allows a wide range of individuals or entities to serve as trustees. The most common options include family members, friends, financial institutions, or professional fiduciaries. It is important to select a trustee who is trustworthy, capable of managing financial affairs, and committed to fulfilling their fiduciary duties. It is advisable to consult with an experienced estate planning attorney to ensure the trustee selection aligns with your specific needs and goals.
Trusts in Florida offer numerous advantages for individuals seeking efficient estate planning and asset management. Whether it’s the convenience they provide, the ability to protect assets, or addressing unique circumstances like minor children or financially challenged beneficiaries, trusts can be a valuable tool. When establishing a trust, careful consideration should be given to selecting a trustee who will faithfully carry out their duties. By working with a knowledgeable professional, you can create a trust that aligns with your goals and provides peace of mind for the future.
At The Law Office of Kelly L. Fayer, P.A., we provide attentive, personal assistance to Florida residents who are looking to prepare for the future. Our experienced lawyer is passionate about helping our clients fully understand their options and implement tools that will accomplish their goals. No matter your circumstances, our estate planning services in Fort Myers are designed to guide you through the planning process and include assistance with a wide range of instruments, from wills and trusts, to advance directives and powers of attorney. When you need an estate planning attorney near you, contact The Law Office of Kelly L. Fayer, P.A.