A trust is a legal arrangement whereby specified assets are managed by a trustee for designated beneficiaries on behalf of the individual, known as the grantor, who created the trust. A trust document specifies the rules for managing, distributing, and disposing of the trust assests. Living trusts are used as part of a broad financial planning process to protect the privacy of the grantor’s assets, for tax benefits, and to facilitate the transfer of assets to designated beneficiaries upon the grantor’s death, or incapacity, without delay or encumbrances. When establishing a Florida living trust, you must determine whether it shall be revocable or irrevocable.
A revocable living trust is designed to maintain the privacy of your assets and to quickly pass the assets through to your designated beneficiaries at the time of your death, or handle such assets during incapacity. A Florida living trust is sometimes used in conjunction with a will. It is important to note that a Florida revocable living trust does not shield the trust’s assets from creditors. The assets in a revocable living trust may be shielded from estate tax upon the grantor’s death. A revocable living trust may be amended or revoked by the grantor at any time.
An irrevocable trust is a legal entity that typically shields the assets that are inside the trust from creditors, litigants and even the grantor’s spouse. It is important to note that the irrevocable trust becomes the legal owner of the trust’s assets and once the irrevocable trust is created, it cannot be amended or revoked. Access to the trust is typically limited to only the trustee and its beneficiaries.
The attorneys at Bauer & Associates have extensive experience in establishing and managing trusts for our DeLand, Deltona, Orange City and DeBary clients. Because a Florida living trust can have significant legal and tax consequences, we can help you determine which living trust is in your best interest. Contact us online or call 386-734-3313 today.