What Components Constitute An Effective Trust In Florida?
The components of an effective trust can differ from trust to trust, depending on the client’s needs. One of the major things we’re concerned about is making sure our loved ones are taken care of after we’re gone. This is especially true if we’re dealing with minor children or children who haven’t gotten to college age yet. We want to make sure that they’re taken care of without the assets of the trust being wasted; we want to make sure that we have specific distribution ages for our younger beneficiaries.
For example, we can say we don’t want any bulk of the trust to be distributed until after the child has reached age 23. They’ll get a part of the distribution then and at 35, they’ll get the remainder. That allows for the child to mature over the years and understand how to handle money versus giving an 18-year-old a significant sum of money, which could be blown through very quickly. The second thing that we’re looking at in this situation is spendthrift clauses. We want to make sure that the money is there for the child, in case he or she gets sued or they need to get government benefits of some kind because of an illness or a disability.
When we do a revocable trust, we can also put in a special needs trust, which is built-in so that the money from the estate doesn’t preclude those persons from getting government benefits, which could assist them greatly. One device that is becoming more common is a trust protector. This is a person outside of the trustee who monitors the trustee and determines whether or not they are performing their duties accurately. This is a safety mechanism that I like to put into my trusts so that we’re certain that we don’t end up with some type of a rogue trustee or irresponsible trustee who’s going to dissipate the assets.
What Are The Different Types of Trusts Available? Do I Need More Than One Type Of Trust?
There are number of different types of trusts available. The two most common types of trusts would be revocable and irrevocable trusts. A revocable trust is basically a document that’s created for the purpose of avoiding probate and determining where our assets will pass after we die and who is going to be in charge of our assets. The revocable trust can be changed, modified, or done away with by the grantor at any time prior to their death. This allows a lot of flexibility and it’s a very free form of trust that allows you to do anything you want with the trust during your lifetime. It does lock in upon your death.
An irrevocable trust is irrevocable. Once it’s put into place, it can’t be changed, with the exception of few circumstances. The purpose of an irrevocable trust is to provide you with asset protection in the event of anything from lawsuits to the need to plan for Medicaid benefits in the future, should someone become disabled. People often think that because they have a revocable trust, it protects their assets. That is not true. It will protect your children’s assets or your beneficiaries’ assets after you have passed. However, during your lifetime, it’s as if those assets in the trust are yours. They don’t have much of a difference in the way they can be used, sold, or invested while you’re alive.
An irrevocable trust can protect your assets while you’re alive. Special needs trusts are in place so that persons with disabilities who stand to inherit money from an estate or from an individual are able to maintain their government benefits. Do you need multiple trusts? It absolutely depends on your situation. If you have a person who is in need of getting government benefits, you’ll need an additional special needs trust.
Some people have special trusts for real estate or life insurance proceeds. It simply depends on your situation. Some of this depends upon your income and the amount of money you’re going to be passing down to your beneficiaries. It’s something you need to sit down and go through with your lawyer to determine whether one or the other is best for you, or if you need a combination of several different trusts.
For more information on Components Of An Effective Trust In Florida, a free initial consultation is your next best step. Get the information and legal answers you are seeking by calling (941) 706-0632 today.
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