Many people believe that trusts are estate planning tools designed only for the wealthy. There is a perception that trusts provide the tax advantages those possessing valuable assets need to avoid paying taxes on them.
Although it is true that people with great wealth often use trusts in their estate plans, it is not true that they are tools only for the rich. Trusts provide advantages to many with modest wealth as well. They can be the best way to ensure that those you want to benefit from your assets when you die are able to do so. They can also ensure you will be cared for should you become unable to care for yourself.
The best way to determine whether adding a trust to your estate plan is right for you is to talk to an experienced estate planning attorney. At the Law Offices of David W. Wilcox, Attorney Wilcox has been helping clients in Bradenton, Manatee County, and Sarasota County, Florida, explore the benefits of trusts for more than 40 years.
What Types of Trusts Are There?
Trusts are legal entities. They are created when the owner of assets transfers ownership of them to this legal entity and appoints someone to manage them. In most cases, the trust creator serves as trustee during their lifetime but names a successor trustee to assume that role should the creator decide they no longer want to manage the trust, become mentally incapable of doing so, or when the trustee dies.
There are two types of living trusts. Revocable and irrevocable trusts are created during one’s lifetime, which is why they are referred to as “living trusts.” A revocable trust allows the transfer of assets from individual ownership to the trust and names the beneficiaries of the trust. As the name suggests, the assets can be added and removed from the trust as the creator chooses and beneficiaries can be changed during the creator’s lifetime.
With an irrevocable trust, the process is the same. However, once the trust is executed, assets placed in the trust must remain in the trust and beneficiaries cannot be removed. Tax advantages are one of the benefits of a trust. Because an irrevocable trust is not subject to revision, it provides more lucrative tax benefits than a revocable trust.
Your estate planning attorney will work with you to inventory your assets which will be subject to the probate process. Your attorney will also help you explore the terms of a living trust, options regarding trustee selection, and which individuals and/or organizations you want to benefit from the trust when you die. Once you select the assets to place in the trust, you will transfer ownership of them from you to the trust.
What Are the Benefits of Trusts?
Many people wonder, how is a trust different from a will? Wills are far less complicated to execute than trusts. However, the benefits of a trust over a will are significant.
First and foremost, living trusts are not subject to the probate process. That is because probate is designed to pay the personal debts and distribute the personal assets of someone when they die. Because ownership of someone’s personal assets is transferred to a trust during their lifetime, they will have no personal assets subject to probate when they die. Your attorney will help make sure you transfer all your assets subject to probate to the trust.
Because a trust is not subject to probate, the assets owned by the trust, its beneficiaries, and how the assets are distributed among them remain private. Probate is a judicial process and as such, it is a public process.
A trust also allows you to place certain conditions on the distribution of assets to its beneficiaries. For example, if you don’t want a child to receive money until they reach a certain age, the trust can ensure that condition.
In addition, a trust can work for you in life and ensure your wishes are honored in death. Should you become mentally incapacitated during your lifetime, the successor trustee will manage the assets of the trust to provide the income you will need for your care. This potential role of a trust is why choosing the right trustee is extremely important.
What Should I Consider When Choosing a Trustee?
“Trust” is the key word to consider when choosing a trustee. This person will be making all decisions regarding the management of the trust from the time they begin their role through the distribution of all assets of the trust.
The only legal requirements for trustees are that they are adults (at least 18 years old) and have the mental capacity to serve. The rest is up to you. You should choose someone you trust implicitly. Moreover, you should choose someone who is likely to make the same decisions in managing the trust that you would yourself.
Trusts Attorney Serving Bradenton, Florida
No matter your level of wealth, trusts are a valuable estate planning tool worth exploring. A trust may not be right for you but then again, it may be extremely advantageous in your estate plan. Attorney Wilcox will take the time to discuss your assets and your wishes for your legacy so you can make an informed decision. Call the Law Offices of David W. Wilcox in Bradenton, Florida, today to schedule a consultation. A trust can work for you in life and in death, so don’t wait. Call now.