You’ve worked hard for your assets. Creating an estate plan can help you protect your assets and maintain peace of mind. Using a trust as part of your estate plan can help you maintain control over your assets and take advantage of important tax benefits. Trusts are effective estate planning tools to have in your arsenal.
What Is a Trust?
A trust is a legal agreement that allows you to transfer your assets into a trust. You can appoint one or more trustees to manage the assets in the trust to benefit your designated beneficiaries. There are many different types of trusts, each with their own purpose. There are two main types of trusts: revocable and irrevocable. An experienced estate planning attorney can help you understand which type of trust can best meet your estate planning needs.
How Trusts Enable Control Over the Distribution of Your Assets
Many estate planners choose to incorporate trusts into their estate plans because they offer significant control over how assets are distributed. Trusts aren’t subject to the probate process, which can be costly and time-consuming. When you create a trust, you control how your beneficiaries will receive your assets. Avoiding the probate process will save your beneficiaries time and money and provide you with anonymity.
Trust agreements aren’t public records. Unlike a will, a trust won’t publicly disclose your assets or beneficiaries. Creating a trust allows you to establish the terms of your estate planning without being subjected to public scrutiny. You can decide who knows what information about your estate and when your beneficiaries receive your assets.
A Trust Allows You to Specify When Your Beneficiaries Receive Their Inheritance
When you create a trust agreement, you have control over how your beneficiaries will receive their inheritance. If one or more of your children are young adults, you may want to include provisions protecting them from financial mismanagement.
You may disburse a limited amount of funds to a younger beneficiary until he or she turns thirty so he or she doesn’t spend his or her inheritance. You can also set conditions for using the assets in the trust. You may want to limit the use of the asset in the trust to purchasing a home or receiving an education.
Tax Benefits Offered By Trusts
In some cases, trusts can provide you and your family members with tax benefits you wouldn’t receive through the traditional probate process. For example, when you transfer your assets into an irrevocable trust, your contributions to the trust may be subjected to gift taxes during your lifetime. However, the asset remains in the trust until after your death; the asset may be exempt from estate tax.
Additionally, you may be able to transfer up to $18,000 into the trust to remain under the annual gift exclusion tax limit. Creating a trust can also be helpful for unmarried tax filers, helping them manage the effects of the Generation Skipping Tax. They can also be a useful tool to decrease your tax liability by creating a charitable trust.
Interested in Creating a Trust in Florida? We Can Help
Creating a trust in Florida can help you limit your tax liability and maintain control over your assets. Verras Law has the experience and knowledge to help you understand the different types of trusts and which trusts or trusts will benefit your unique estate planning needs and goals. Contact Verras Law to schedule a complimentary consultation and learn more about how creating a trust can help your long-term estate planning needs and goals.