Trusts: A Powerful Estate Planning Tool

Trusts are one of the most powerful tools in estate planning. Unlike wills, trusts can take effect during your lifetime. They are created for the benefit of one or more beneficiaries and are created by the settlor (grantor). Oftentimes, when the grantor is still living, they are also the trustee (trust manager). Trusts allow you to transfer assets, manage property, avoid probate, and support beneficiaries according to specific instructions determined by the grantor.

Types of Trusts in Florida

• Revocable Living Trusts: This type of trust is one of the more common types of trusts due to its versatility, flexibility, and ability to avoid probate. It can be managed by the grantor during their life and have assets added and taken away from the trust. Upon the passing of the grantor, the residual assets will be distributed according to the trust plan to the designated beneficiaries.
• Irrevocable Trusts: These types of trusts cannot be changed, as they are irrevocable, even by the original grantor. Some people choose this type of trust as it adds added protection to assets from creditors and certain government programs such as Medicaid.
• Special Needs Trusts: This type of trust is typically chosen if the intended beneficiary is someone who receives government benefits because of their own special needs. It allows them to receive the benefit of your trust without affecting their income and eligibility for the benefits they already receive.
• Charitable Trusts: This is another somewhat versatile trust as the grantor can still utilize assets within the fund while allocating portions for charitable purposes. This type of trust can be eligible for income tax credits as well.