Essential Florida Asset Protection and Estate Planning Strategies

Florida provides its residents with a diverse array of asset protection and estate planning strategies which can be utilized to safeguard assets from potential risk and solidify your estate plan.

In this two-part series, we will generally discuss a few of the essential strategies that Florida residents can use to protect their assets and fortify their wealth and estate. This, the first article in the series, will focus on what asset protection is and how it works. This will also include a general discussion of several types of trusts. The series will go on to discuss the advantages of Florida residents leveraging the Homestead Exemption, as well as the advantages of utilizing Joint Accounts and Beneficiary Designations.

What Is Asset Protection and How Does it Work?

In Florida, the term “asset protection” refers to a set of legal and financial planning strategies that operate in a way that shield assets, to a degree, from certain creditors, lawsuits, and liabilities. Many individuals come to Florida for the very reason that the Florida legal landscape has developed to offer estate planners a number of options and strategies when it comes to building their estate and utilizing certain aspects of asset protection. These protections and strategies work to help preserve assets and ensure strategic distribution of the assets to intended beneficiaries. This comes with the added benefit of minimizing the asset’s exposure to potential liabilities or other such threats.

An experienced wills & probate attorney can further explain all of the ways that asset protection strategies can be of benefit to you and your specific assets and estate. Depending on the estate at issue, several various mechanisms may be appropriate, such as establishing trusts, creating limited liability corporations, etc.

Strategies for Florida Asset Protection Planning

Irrevocable Trusts

A trust may be one of the most effective estate planning and asset protection strategies available. This is particularly true when one considers the diverse types of trusts that exist.

One type of trust that can be particularly effective, depending on your goals, is the irrevocable trust. Irrevocable trusts can offer people higher levels of asset protection, because the assets placed in an irrevocable trust are no longer in the hands of the grantor.

Yes, you read that right. Unlike revocable trusts, which can be altered or revoked by the grantor, an irrevocable trust is a one and done. The assets placed in trust are out of reach of the grantor. This can be both a blessing and a curse – the grantor will not have legal standing to change the terms of the irrevocable trust. So be wary of that and do not move forward unless you feel comfortable with it. But for those who do use irrevocable trusts, the grantor’s creditors cannot access the asset because, well, neither can the grantor.   

Consulting with an experienced estate planning attorney is imperative. A seasoned professional can help you navigate all of the options available and help you to select the most suitable trust structures that will most effectively help you reach your individual goals.

Some Additional Trusts

In addition to the irrevocable trusts briefly discussed above, Florida offers many more trust options. These options include (but are not limited to):

• Irrevocable Life Insurance Trust (ILIT): Operates to protect certain life insurance proceeds and can help to mitigate certain tax liabilities
• Qualified Personal Residence Trust (QPRT): Operates to remove a residence from an estate. This can help shield properties from creditors and mitigate certain tax liabilities.
• Spendthrift Trust: Restricts a beneficiary’s access to the trust principal, which also operates to help shield that principle from the beneficiary’s creditors.

The above merely scratch the surface of what these trusts and the Florida legal landscape can offer Florida residents. Additional trusts, such as dynasty trusts and various charitable trusts, are additional tools that can also be further explained and implemented by one of the experienced wills & probate attorneys at Suncoast Civil Law.

Contact Suncoast Civil Law

The Sarasota wills & probate attorneys at Suncoast Civil Law are standing at the ready to discuss the specifics of your own estate. Contact our team for counsel on how to strategize the best path forward and securing the optimal structure of your own estate plan.

Sources:

kiplinger.com/retirement/how-did-oj-simpson-avoid-paying-the-brown-and-goldman-families

forbes.com/sites/jayadkisson/2024/03/13/a-primer-on-creditor-exemptions/