Thinking about adding a trust to your Florida estate plan? As you make your plans for the new year, you should meet with your Florida estate planning attorney and consider a trust.  Are you aware that a trust is an estate planning tool created for the management of assets, both during your life and after your death? In addition, there is not just one type of trust, but several used in estate planning. In regard to this blog and in order to make trusts easier to understand we will divide trusts into two categories. Trusts are either revocable or irrevocable. This means they can either be changed or canceled after they are created or they cannot. Be aware that there may be important legal implications in choosing between revocable or irrevocable.

A revocable trust:

• created by a trustor

• trustor remains as the beneficiary until death

• upon death of trustor passes on to the successor trustee and beneficiaries

• married couples often create and are both co-trustees and co-beneficiaries until death

• upon death of married couple, adult child becomes successor trustee

• other children and even grandchildren, become successor beneficiaries

• NO tax benefits because this trust can be revoked or changed before original trustor’s death

• often created to distribute assets to beneficiaries to avoid probate

An irrevocable trust:

• once created it cannot be changed, except under limited circumstances

• when the assets are put into the trust, they are no longer considered the property of the trustor, instead, they are the property of the trust

• limits or eliminates both income and estate tax and usually cannot be reached by trustor’s creditors

• often used as a long-term planning tool

• because the assets are not owned by the trustor, they ARE NOT considered when determining whether the trustor is eligible for government programs, such as Medicaid

• often used as a special needs trust for an adult disabled child

• when the parents of a disabled adult child pass away the special needs trust, which is irrevocable, will enable the disabled child to remain eligible for government programs

Planning for the future is critical to ensure that your goals for the end of life are achieved. We know this article may raise more questions that it answers.  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.