Regardless of size, you will have to make a myriad of decisions when creating your estate plan. A Living Trust, for example, is a tool for passing assets and property directly to beneficiaries upon your death without probate. There are many advantages to creating a Trust over a Will, and you will need to decide which Trust best accommodates your situation.
Trusts and Wills
In a Last Will and Testament, you state your wishes for how you would like to have your assets distributed in your passing, as well as designate guardians for your children. However, Wills have to go through probate court before your heirs receive their inheritance.
With a Trust, your assets are transferred into the Trust while you are alive and become property of the Trust. You can state how you would like the assets to be distributed as you would in a Will but with more options in distribution to your heirs. For example, property can be held until the beneficiary turns a certain age, assets can be managed a certain way in the event of your incapacitation and inability to make decisions. These stipulations cannot be accomplished in a Will.
Revocable vs. Irrevocable Trusts
The first decision you have to make if you decide to put your assets in a Trust is whether a Revocable or Irrevocable Trust will provide the accommodations you require.
- Revocable Living Trust
With a Revocable Trust, the person who sets up the Trust (the Grantor) can also be the person that controls the assets (the Trustee). As the Trustee of your own Trust, you are in sole control of the assets. As the name suggests, a Revocable Trust can be revoked at any time.
- Irrevocable Living Trust
In an Irrevocable Trust, while the Grantor can be the same person as the Trustee but with asset protection not available in a Revocable Trust. This type of Trust is often used to plan for long-term care. Assets in an Irrevocable Trust do not have to be used to pay for medical care, and can aid the Grantor qualify for need-based benefits such as Medicaid or Veterans benefits.
Advantages of a Revocable Living Trust
Why should you turn your assets over to a trust? Here are several important considerations for doing so:
- Avoiding Probate – Assets in a Trust do not have to go through Probate. Many people want to avoid Probate as it is a public process that can take months to complete.
- Avoiding Estate Taxes – If you have a considerably valuable estate, you can avoid estate taxes with a Revocable Living Trust.
Planning for Incapacity – In the event where you are unable to make decisions for yourself, the Trustee of your Revocable Living Trust can make decisions on your behalf based on your wishes stated in your Trust
Setting up your Revocable or Irrevocable Trust in Fort Myers, FL
The Sheppard Law Firm has near a century of experience in dealing with all the nuances of Trusts and Estate Planning. We understand that an Estate Plan is not a one-size-fits-all solution, and we would be happy to assist you in deciding the best options that suit your unique situation.