Key Florida Estate Planning Trusts You Should Know About
Florida law has developed to offer its citizens diverse and unique options for setting up robust estate plans and asset protection strategies. These include a number of Trusts that can be employed to manage your estate/assets in various ways. This article will go over the general basics of several trust options available to Florida citizens. It is, of course, vitally important to discuss the nuances and details of these various estate planning tools with knowledgeable estate planning attorneys. The experienced will & probate attorneys at Suncoast Civil Law can help you understand how the various estate planning tools might be utilized in your own estate.
What Is a Trust and How Does it Work?
A trust is a legal, contractual document that allows one person or party, the grantor, to give another person or party, the trustee, the right to manage assets for the benefit of a third party – known as the beneficiary. The trust is drafted to reflect the wishes of the grantor for how assets will be distributed. The trustee is then responsible for administering the trust – explaining the terms of the trust to the beneficiary, and holding and managing the assets in accordance with the terms of the trust.
There are many different kinds of trusts that are utilized to accomplish different goals. While every trust framework is different, below we discuss some of the high-level generalities pertaining to several types of trusts available to estate planners in Florida.
Revocable Trusts and Irrevocable Trusts
A revocable trust is a trust mechanism that allows a grantor to alter or revoke terms of the trust – or revoke the trust entirely. This can be a useful tool if/when a grantor wants to maintain a great level of control over assets in the trust.
An irrevocable trust, on the other hand, cannot be revoked by the grantor – hence the “irrevocable” part of the title. The pay-off on this is that this type of trust offers heightened asset protection. Because the assets in the trust are beyond the control and reach of the grantor, those assets are going to be shielded against creditors who would otherwise gain access to the grantor’s assets.
Irrevocable Life Insurance Trust (ILIT):
In Florida, ILITs can be used to ensure efficient transfer of wealth to beneficiaries, and can be beneficial in mitigating tax liabilities. ILITs are trusts that are established to enable ownership of life insurance policies outside of the insured’s estate. Establishing the ILIT can offer some asset protection by limiting the reach of creditors into the life insurance asset.
Charitable Trusts
Florida offers the option of developing charitable trusts. These trusts offer unique benefits and provide the opportunity for grantors to support charitable causes.
These charitable trusts include charitable remainder trusts – which allow grantors to donate assets while retaining an income stream for themselves or designated beneficiaries for a specified term. This type of trust offers some tax benefits and a potential to defer certain capital gains taxes.
There are also charitable lead trusts, or CLTs, which allow grantors to donate assets to a charitable trust and provide income to a charitable organization for a specified term. This trust can offer potential tax savings and be an efficient way to transfer wealth to beneficiaries. An experienced will & probate attorney can help you better understand these options, and others, that can be utilized to build and protect your estate plan.
Contact Suncoast Civil Law
Trusts come in many forms, each offering distinct benefits. You can tailor your estate plan to fit the specific needs and objectives of your own estate. Consult with an experienced Bradenton will & probate litigation lawyer at Suncoast Civil Law to build a comprehensive estate plan tailored to your specific needs.
Sources:
bgca.org/news-stories/2024/August/what-is-planned-giving/
leg.state.fl.us/Statutes/Index.cfm/index.cfm?App_mode=Display_Statute&URL=0700-0799/0736/0736.html