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Estate Planning: What Are the Benefits of Setting Up a Trust in Florida?
Are you confused about how to distribute your assets to your beneficiaries after you pass away? Curious about your options? We can help. Our estate planning attorneys provide families with simple, creative legal solutions at Family First Firm. Read on to learn the benefits of setting up a trust in your estate plan. Then contact our estate planning attorneys in Florida to begin the process of creating a trust.
As we discuss in more detail below, you have two primary options concerning the distribution of your assets: a will or a trust. These tools can dictate your plans for your estate and who will receive specific assets. However, creating a trust offers several benefits over a will that many people fail to realize.
Trusts Can Avoid Probate
One of the primary benefits of trusts over wills is that trusts can avoid probate.
When you create a will to dictate your plans for your estate, your family members will need to go through probate, which is the legal process of validating the will. Unfortunately, the probate process can take time and create more stress on your family members as they grieve your death while closing the estate.
However, when you place assets in a trust with specific directions about their beneficiaries, your family members can receive their assets directly without needing to go through probate. Consequently, they can close your estate and receive their assets faster.
Trusts May Provide Tax Benefits
In some cases, trusts can allow for tax benefits that your family members would not receive through the traditional probate process.
When you transfer assets into an irrevocable trust, the contributions within the trust may be subject to gift tax requirements while you are alive. However, if the assets in the trust do not transfer out until after your death, they may be exempt from estate tax.
Additionally, you may be able to make an annual gift to your irrevocable trust exempt from gift taxes. The annual gift tax exclusion in 2022 is $16,000. As a result, transferring assets under this limit can allow them to avoid the gift tax.
Creating an irrevocable trust with the help of an "estate planning attorney near me" can ensure that it meets specific conditions to allow for tax benefits.
Trusts Offer More Privacy
When you create a will, it must go through probate, and the contents will become public record. As a result, anyone who wants to know how you have distributed your assets can easily obtain this information. Depending on the contents of your will, this information may lead to conflicts after your death.
However, trusts offer more privacy than wills because they do not go through probate and never become public record. Only your beneficiaries will know what assets you hold in the trust and how much they will receive after your death.
Trusts Provide More Control Over Your Assets
Trusts also allow for greater control over the assets you give to beneficiaries.
When you create a will, your property and assets will transfer to your beneficiaries after you die. However, you cannot control when they receive these assets or what they do with them.
However, trusts allow for more specific instructions about their assets and beneficiaries. For example, you can specify that beneficiaries receive assets on certain birthdays or once they reach certain milestones. You can also dictate how a beneficiary should use the assets in the trust, for example, to create a nonprofit organization.
Your trust attorney can help you structure your trust correctly to uphold your specific wishes for your property and assets after your death.
Trusts Allow For Greater Flexibility
Depending on the type of trust you create, you can benefit from greater flexibility within a trust than a will.
The two main types of trusts are revocable and irrevocable trusts. A revocable trust allows for changes within your lifetime. However, you cannot alter irrevocable trusts.
When you create a revocable trust, you can alter the assets and beneficiaries within the trust as necessary to ensure that it stays up to date with your changing needs and desires.
Additionally, creating a trust instead of a will can allow for more flexibility when your beneficiaries live outside of Florida. Instead of going through probate in their own state, your beneficiaries can directly receive the assets in the trust.
Trusts Can Provide Funds During Illness — Not Just Death
When you create a trust, you can establish specific circumstances in which your beneficiaries would receive the assets. For example, you can allow the trustee to make distributions if you become ill or disabled and unable to manage your assets. Your beneficiaries can use these funds to pay for medical bills and other expenses.
If you're considering a trust instead of a will, our estate planning attorney team can help. Contact the Family First Firm today at (407) 574-8125 or fill out our online form to schedule a consultation. We are always by your side.