What is a trust?
When you hear the words “trust fund” does it conjure up images of yachts and mansions? A trust fund—or trust—is actually a great estate planning tool for many people with a wide range of incomes who want to accomplish a specific purpose with their stuff (money and property). A trust is an arrangement that allows a grantor to give a trustee the right to hold and manage assets for the benefit of a specific beneficiary. So, what’s that mean in English?
I think of a trust as a box that holds all your stuff. When you create a trust as part of the estate planning process, you are the grantor because you put all the stuff in the box. You’re also the trustee because you get to decide to do with your stuff even after you put it in the box. Finally, you are the beneficiary because you still get to use the stuff in the box. During your lifetime, you can take things out of the box, put things in the box and do whatever you want with the stuff in the box.
What would I want a trust?
There are a number of reasons that a trust may make sense for you. Perhaps you want to keep things private and the stuff inside a trust doesn’t have to go through probate when you die. As you may remember from last week’s post, probate is the court process that determines whether a person died with a valid will, who will wind up the affairs of the person who died and who will get their stuff. It’s public, will generally involve attorney’s fees and court costs and can be time-consuming.
If you have children under 18, you may want to leave your stuff to them in trust because minors can’t directly inherit. And even if your children are adults, a trust can help protect the stuff you leave to them from creditors, legal judgments, divorce or even poor money management habits.
You can even establish a trust for yourself in case you become incapacitated and cannot manage your own finances at some future time. The stuff in the trust would be managed by someone you name (a successor trustee) which avoids the need for a court-appointed conservator.
Trusts are also useful tools for blended families. If you are remarried and have children from a previous marriage, you can provide for your current spouse while ensuring that your stuff passes to your children from your first marriage.
Can I have both a will and a trust in Florida?
Yes. It’s pretty common to have a will even when you have a trust. Some trusts are testamentary trusts, which means that they are created by a will. And sometimes people will forget to put their stuff in the box (trust) so they create a will that sends anything that may have been left out of the box when they die into the trust.
Are trusts only for rich people in Florida with lots of assets?
No, trusts can be created by anyone who wants to set aside stuff for someone but who does not want to give them the stuff all at once. They are especially common when the beneficiary is underage or is unable to manage their own affairs.
Contact an Estate Planning Lawyer in Florida Today
At The Williamson Firm, we know you have lots of questions about estate planning, and are here to answer your specific questions. Contact us either by using our online form or calling us directly at 904-412-8739 to schedule a Free Consultation.
