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Have You Considered What a Trust Could do for Your Estate Plan?

11/15/2016

Estate Plan

Trusts are not ‘one-size-fits-all’ documents, but a trust designed by an experienced estate planning attorney can be a useful addition to your estate plan. An article appearing in Physician’s Money Digest, “6 Reasons You May Need a Trust,” explains that a trust functions like a container that holds assets until they are distributed to people or charities designated in your will. They are legal entities, just like a person is, and when assets are transferred from a person into a trust, the asset becomes the property of the trust.

The three separate parties to a trust are: (i) the grantor, who creates the trust; (ii) the beneficiaries, who receive income and/or principal from the trust; and (iii) the trustee, who manages the trust pursuant to the trust document. The trust document has the rules set by the grantor regarding how the trust is to be managed. These rules instruct the trustee on administration, such as how to invest and manage trust assets, any limitations on trust activities, when and how to distribute principal and income earned, and who receives the distributions.

There are many different kinds and uses for trusts. Here are a few of the reasons for considering one:

Protection from predators. If you want to leave property to a relative but need to make sure the beneficiary doesn’t lose it in a lawsuit, a properly drafted trust is untouchable by the legal system.

Protection for someone from themselves. Too many young adults’ lives are ruined by inheriting large sums of money while they are young and irresponsible. A trust can give the authority to a reliable trustee to determine when beneficiaries are ready for their money.

Disability planning. You can provide for a disabled relative without disqualifying him or her from Medicaid or other government assistance with the help of a “Special Needs Trust” (SNT). This lets you set aside funds for the care and benefit of a person with special needs and the trust isn’t considered an asset when he or she applies for government benefits.

Estate planning. The first $5.45 million ($5.49 million in 2017) of property per decedent is exempt from taxation. Multiple marriages are a good reason to use a trust in estate planning. If you and/or your spouse have children from previous marriages, you can use a trust to be certain that the remainder of the estate of the first to die goes to your own children by blood, while giving support to the surviving spouse during his or her lifetime or until remarriage.

Privacy and simplicity. No one will know who owns trust property except for you, your attorney, and the trustee. Trust property doesn’t pass through probate.

Asset protection. If you are concerned about shielding assets from lawsuits, divorce or bankruptcy, trusts can be used as a means of protection. Another use: if your beneficiary does not need the entire principal in a trust, you can have a provision included that will allow unspent assets to be locked in and that would keep them secure and protected.

The laws that govern trusts are complex, so you’ll need to work with an attorney with a lot of experience in how trusts are used in estate plans.

Do you live in Miami-Dade, Broward, or Palm Beach counties in Florida? Laws are constantly changing-- has your estate plan been reviewed in the last 2-3 years? Call me (954-888-1747) right away for peace of mind. I can help!

  • My practice is exclusively estate planning and probate,
  • I have prepared numerous estate plans in 16 years of practice,
  • I have administered estates and trusts through Probate all over Florida,
  • I am a Certified Financial Planner Professional™, and
  • I am here for YOU today and there for your FAMILY tomorrow.

Reference: Physician’s Money Digest (October 26, 2016) “6 Reasons You May Need a Trust”

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Why would we recommend D.T.F.? Several Reasons: Your ability to explain complex estate problems, clearly and patiently; your total lack of arrogance and pretense; a strong feeling that you are motivated by what you perceive is best for your client, rather than what would generate the largest legal fees; finally, and importantly, you are a lovely guy. A.C.
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Two words cannot sum up the entire process of creating my “trust.” I enjoyed your attention to detail, your patience of explaining terms and conditions until I understood, also giving me copies to read and understand. Thank you for your suggestions on what was best for “me” but still allowing me to make my choice. Most of all, thank you for thinking of “me.” Wells Fargo said “you were the best” I cannot deny that. Again thank you very much for everything. Anna is an asset or a compliment to the firm. She is warm and very caring. It was great doing business. Thank you.

P.M.