Are you reflecting on the resolutions you made for the new year? We believe that creating a Florida estate plan is one of the most important New Year’s resolutions you can make this year. A Florida estate plan can protect both now, while living, and at the time of your death. Your Florida estate planning attorney will work with you to create a plan that ensures your choices for your health care and finances are honored by your chosen decision maker. In addition, your estate planning attorney will also show you how you can ensure that your family will be provided for when you are no longer here with them.

While you are working with creating your plan with your attorney, have you considered adding a trust agreement to your estate plan? Are you aware that there is more than one type of trust? In fact, there are many different types of trusts. In the following paragraphs we will discuss some of the basics about trusts and also the different types of trusts.

As we begin this discussion on trusts, you may wonder who are the people involved in a trust? The person who creates the trust is called the trustor, grantor, settler, or creator. The person who receives distributions from the trust is called the beneficiary. The trustee is the fiduciary who manages the trust property. A single person can serve in more than one role at a time. A person may be the trustor, trustee, and beneficiary simultaneously. In the alternative, more than one person can have the same role, as in co-trustees or co-beneficiaries.

Is there anyone with authority in a trust? Yes, trustees have discretionary or non-discretionary authority in distribution according to the terms set forth in the trust document. A beneficiary can receive income or dividends from money earned by the trust or may be a remainder beneficiary, who receives what is left after the primary beneficiary passes away. A very important point to remember is that a trust is a legal document, but the trust is not deemed created, until the property has been transferred into the trust.

Following below are the four most common types of trusts including the revocable, irrevocable, special needs, and spendthrift trusts. Also included is a brief explanation of each.

• A revocable trust is commonly used by married couples. It can even serve in place of a will. One benefit of this particular trust is that it can be changed or revoked and it can allow probate to be avoided following the trustor’s passing.

• An irrevocable trust cannot be modified or revoked which is very important for the creator to know. However, it has many benefits, including tax benefits, protection of assets from creditors, and utilization in long-term care planning to exclude a person’s assets from his or her eligibility determination for Medicaid.

• A special needs trust is a very important trust and is created to provide for a person who needs assistance for life, often a child of the trustor. The language in a special needs trust is key, because it ensures the beneficiary can receive financial support from the trust without being disqualified from government programs for those with special needs.

• A spendthrift trust is an irrevocable trust. This trust is vital in that its provision limits the beneficiary’s access to the trust principal. The beneficiary and the beneficiary’s creditors cannot force distributions. The spendthrift provision is often used when the trustor wants the beneficiary’s spending monitored, such as in the case of a person with a substance abuse disorder.

Armed with the knowledge of the different types of trusts used in estate planning, it is a great time to meet with an experienced Florida estate planning attorney to discuss the right trust for you. We know working through legal matters can be exhausting. You may have many questions, but not know where to find the answers. At Poucher Law, we work closely with clients to help them find the answers they need.

We do telephone, computer, and face-to-face appointments. Our face-to-face appointments are held outside in the open air (frequently selected by clients for document signing) and inside our office conference room. We follow all CDC guidelines. Our office procedures adhere to COVID-19 safety protocols and are designed and enhanced by medical review and air quality engineering.