TRUSTS AND ESTATES
UNDERSTANDING A TRUST
A trust is a legal entity that exists to hold assets on behalf of one or more beneficiaries. The trust is created by a grantor and can be filled with assets of almost any kind. These assets are then managed by a trustee during the term of the trust. Trusts can last for a person’s lifetime, for a set number of years, or until the beneficiary reaches a certain age. Trusts can also be used to avoid probate both in Florida and any other state where a person owns real property.
Beyond this broad description, trusts take on many different forms. Trusts can be either revocable or irrevocable, meaning they can be created and undone at will. Some trusts begin during the grantor’s lifetime, while others exist only after a person’s death. Trusts also may be used for charitable purposes, to hold assets for a loved one with special needs or the benefit of your pets, or to shield assets against creditors. In short, trusts can be used to accomplish a wide array of objectives ranging from probate avoidance and creditor protection to advanced estate and tax planning. A knowledgeable Florida estate planning attorney can construct a trust designed to fit your needs.
The Roark Law Firm has experience helping clients with the following forms of trusts:
• Revocable Trusts
• Testamentary Trusts created in a person’s Will or Revocable Trust
• Irrevocable Life Insurance Trusts
• Intentionally Defective Grantor Trusts
• Charitable Remainder Trusts
• Pet Trusts
• Special Needs Trusts
WHAT IS THE DIFFERENCE BETWEEN A TRUST AND A WILL?
Many people try to make over-generalizations when it comes to the powers of trusts or the ease of wills. The truth is that one is not necessarily better or worse than the other, they are just different. Both are legal documents that must be executed in accordance with Florida law and that can be used to direct how assets will pass after death. One main difference is that a Revocable Trust goes into effect while the Grantor is still alive and can be used to shield assets from going through the probate process. Wills, on the other hand, must be probated in order to be effective.
Both Wills and Revocable Trusts are incredibly useful and can have a place in an effective estate plan. Where a trust may be a huge benefit to some families, it may not make sense to others. Where a will is a great vehicle for distributing some assets, it may make less sense for passing along other types of assets. Consult an experienced Florida estate planning attorney for help with crafting the right plan for you.
HOW TRUSTS ARE CREATED
A trust is a legal document that creates a fiduciary relationship in which a party, the Grantor, gives another party, the Trustee, the right to hold property or assets for the benefit of another, the Beneficiary. It should be noted that the Grantor may also serve as the Trustee of a trust. Similarly, the Trustee may also be a beneficiary of the trust. The trust document will spell out the duties of the trustee, specify how assets can be used for the benefit of the benificiaries, and create safeguards against creditors and incapacity. Once the trust is executed by the Grantor it can be filled with assets of almost any kind. Trusts can last for a person’s lifetime, for a set number of years, or until the beneficiary reaches a certain age.
Florida law states that a trust document must be executed with the same formalities as a Will, i.e., the grantor must be mentally competent, the document must be written and signed by the grantor and two witnesses. A trust that is not properly executed will not be valid.