Top Ten Irrevocable Trusts in Florida

In Florida, an irrevocable trust is a type of trust that cannot be modified, amended, or revoked once it has been created, except under very specific circumstances. These trusts are often used for estate planning, asset protection, and tax benefits. Some common types of irrevocable trusts in Florida are discussed below.

Irrevocable trusts are very diverse, but that all have several things in common. Above all, a St. Petersburg trust lawyer should be intimately involved in the process from start to finish. As mentioned, irrevocable trusts are normally set in stone from the beginning. Therefore, any error in this process, such as selecting the wrong kind of trust, cannot be rectified.

Irrevocable Living Trust (ILIT)

Perhaps the most common irrevocable trust in Florida removes assets from the settlor’s estate, potentially reducing estate taxes. In many cases, the tax savings is significant. So, settlors (people who create trusts) pass assets to their beneficiaries instead of tax bills.

Furthermore, while the settlor is alive, an ILIT protects property in the corpus (property in the trust) from creditor seizure. The arrangement may have tax benefits for settlors as well, since the trust, not the individual, legally owns property in the trust.

Significantly, the settlor cannot change or revoke the trust once it’s created. So, a St. Petersburg estate planning lawyer must get it right the first time.

Irrevocable Life Insurance Trust (ILIT)

This trust is designed specifically to hold a life insurance policy. Since the death benefit of the life insurance policy is excluded from the settlor’s estate, estate taxes often plummet. Life insurance premiums are paid by the trust, and the proceeds are distributed to beneficiaries according to the trust terms.

Charitable Remainder Trust (CRT)

A CRT allows the settlor to donate assets to charity and receive income from them for a set period of time, or for life. When the settlor dies, the remainder of the items in the corpus, which is usually the property itself, transfers to the charity. CRTs often give another gift as well. The process often avoids excessive taxes, as mentioned above.

Charitable Lead Trust (CLT)

The anti-CRT gives income to a charity for a set period, with the remaining assets going to the settlor’s beneficiaries upon the settlor’s death. CLTs are ideal for people who want to donate to charity now and give something to their beneficiaries later.

Special Needs Trust (SNT)

Usually, a SNT provides for disabled beneficiaries without disqualifying them from government assistance programs, such as Medicaid or Supplemental Security Income. So, Tom has no money and is eligible for Medicaid, and the money from an SNT allows him to be in a nicer facility.

Asset Protection Trust

A St. Petersburg estate planning lawyer doesn’t do too many APTs, which shield assets of high-risk professionals, such as doctors, from future liability judgments. Florida law does not permit domestic asset protection trusts (DAPTs), but it does allow offshore asset protection trusts.

Testamentary Trust

This trust is connected to a will and provides for minor children if the settlor dies suddenly and unexpectedly. It only becomes irrevocable after the settlor dies.

Qualified Personal Residence Trust (QPRT)

QPRTs immediately transfer ownership of primary residences or vacation homes to beneficiaries while settlors retain the right to live in the homes for a set number of years. A QPRT removes a home from the testamentary estate for estate tax purposes.

Irrevocable Trust for Minors

These trusts are similar to testamentary trusts in many respects. The main difference is that ITMs include asset management provisions.

Spendthrift Trust

A spendthrift trust safeguards assets against being accessed or misused by creditors of the beneficiaries. These trusts also prevent beneficiaries from squandering their inheritances.

Work With a Dedicated Sarasota County Lawyer

Proper estate administration is just as important as proper trust creation. For a confidential consultation with an experienced elder law attorney in Bradenton, contact Drude Tomori Law. We routinely handle matters throughout the Sunshine State.

Source:

investopedia.com/terms/i/irrevocabletrust.asp