What Type Of Trust Is Right For Your Situation?
When a person is thinking about estate planning, very often they will entertain the possibility of establishing a trust to help disburse their assets, particularly if they want to avoid probate. However, there are several different types of trusts that can be established under Florida law, and without the right legal help, you may become confused about which is the best for your specific situation. Enlisting an experienced attorney can help make matters clear.
By far the most common type of trust for the average person is a living trust, often (though not always) specified as being revocable. A revocable living trust is created in Florida by a person, usually referred to as the settlor, who places their assets into a trust account with a definite beneficiary. Most of the time, the settlor is the initial trustee, and can then use the balance for their own benefit while still living. The trust is “living” and “revocable” while the settlor trustee is alive – but upon their passing, the trust is no longer revocable, and its contents will pass on to be controlled by the next trustee.
For most people, the major advantage of a revocable living trust is that the assets titled in the name of the revocable living trust do not have to go through probate. The reason most estates must go through probate is to ‘prove’ the deceased person’s will as valid, and to disburse the bequests in it – but if assets are already in a trust, they are not covered by the will. However, those who create revocable living trusts should be aware that they do not offer any kind of asset protection from the settlor’s creditors.
Other Types of Trusts
A revocable living trust is the choice of many, but sometimes, it may be too generalized for the specific situation you and your family are in. There are other, more narrowly focused types of trusts that may better suit your purposes. Some include:
- Charitable trusts, which must benefit an IRS-designated charity. These can be either private foundation trusts (all proceeds of your estate going to the charity), or what are called split interest trusts (where the proceeds from the trust benefit your immediate family, then the remainder will go to the charity upon their passing).
- Special needs trusts, which are intended to set aside assets for a disabled family member under the age of 65. There are varying types of these trusts, but the most common is the “General Support Special Needs Trust,” which is intended to provide support in addition to the government benefits that a disabled person may be entitled to.
- Asset-protection trusts, also called “spendthrift” trusts. This type of trust is fairly standard, except that it contains language that restricts the beneficiary from transferring any of their interest in the trust, as well as restricting any of the beneficiary’s creditors from reaching the trust fund.
Contact A Naples Estate Planning Attorney
There are still more types of trusts, any of which might be best for your situation, but it is always a good idea to consult an attorney in order to ensure that any trust that you need is set up right. If you have questions or concerns regarding your own estate, calling a Naples estate planning attorney from Nici Law Firm may be the first step toward ensuring all is how you want it to be going forward. Contact our offices today via our website, or on the telephone at 239-449-6150, to schedule a consultation.