What You Should Know About Family Trusts
One of the main reasons people make trusts is to simplify the asset distribution process. A family trust may be the best way to achieve this goal. These vehicles, like other trusts, have other advantages as well. They avoid probate with its costs and publicity. Trusts also shield assets from creditors, are harder to challenge than wills, and include other family protections.
A St. Petersburg estate planning lawyer maximizes all these benefits of a family trust. Usually, the family trust is just one component of a comprehensive estate plan. A good St. Petersburg estate planning lawyer takes some extra time to learn your needs and goals before the document preparation process begins. The slight investment of time helps ensure that estate planners get what they need instead of a cookie-cutter plan that was designed with someone else in mind.
What is a Family Trust?
A family trust is a living trust. It’s established during the lifetime of the settlor (person who makes a trust). A family trust can hold a variety of assets, including real estate, bank accounts, investment accounts, business interests, and personal property. The settlor transfers ownership of their assets into the trust, and the trust is administered by a trustee.
Usually, the settlor and trustee are the same person. The trustee is responsible for managing the trust assets according to the terms set forth by the grantor and distributing them to beneficiaries as specified in the trust agreement. So, except for legal ownership, family trusts don’t have much day-to-day effect during the settlor’s/trustee’s lifetime.
Most people choose revocable family trusts. The settlor can alter or revoke the trust at any time. This type of trust allows the settlor flexibility, but it does not offer protection from creditors or estate taxes.
An irrevocable family trust is also an option. Once established, an irrevocable trust cannot be changed or revoked. This type of trust offers greater protection from creditors and potential estate tax savings since the assets are no longer considered part of the settlor’s estate.
Advantages of a Family Trust in Florida
Probate avoidance is one of the most significant benefits of a family trust in Florida. Probate is time-consuming, expensive, and public. A trust passes assets directly to beneficiaries without going through the court system.
Furthermore, a family trust, especially an irrevocable one, protects family assets from creditors, lawsuits, and other legal challenges. Once assets are transferred to the trust, they are no longer owned by the grantor, offering a level of protection from claims.
Finally, a family trust gives the settlor control over how assets are distributed. For example, the trust can specify that certain assets are distributed to beneficiaries at different times, such as upon reaching a certain age or achieving a milestone.
Incidentally, for families with minor children or beneficiaries with special needs, a family trust can include provisions to ensure that these individuals are provided for following the settlor’s death. Trusts can be tailored to provide ongoing support for beneficiaries, including medical care, education, and living expenses.
Connect With a Savvy Sarasota County Lawyer
The essential estate planning process isn’t as complicated as many people believe it is. For a confidential consultation with an experienced estate planning lawyer in Sarasota, contact Drude Tomori Law. After hours visits are available.
Source:
tiaa.org/public/learn/retirement-planning-and-beyond/what-is-a-trust
