Trusts
Trusts serve many different purposes, from avoiding probate to asset protection to ensuring public benefits like Medicaid are not interrupted. Whether you need help setting up a trust, funding a trust, administering a trust, or just want to know if a trust is right for you, we can help.
What Is a Trust or Trust Agreement?
A trust is created when one person holds property for the benefit of another. The person who gives the property is called the settlor or grantor; the person who receives the property and maintains it for the benefit of another is the trustee; and the person who ultimately benefits from the property is the beneficiary. Sometimes the settlor is also a trustee and beneficiary, but there must also be another beneficiary—maybe one that receives the property after the settlor dies—in order for there to be a valid trust.
Trusts come in many varieties but generally fall into three categories: revocable, irrevocable, and testamentary.
Different trusts are used for different purposes. While most people who want to establish a trust will want a revocable trust to pass assets to beneficiaries outside of probate, irrevocable trusts can be useful for tax planning, asset protection, or to ensure that a beneficiary continues to qualify for public benefits, such as Medicaid. Since everyone’s situation is unique, you should consult with a Florida estate planning attorney to determine if a trust makes sense for you.
What are Different Types of Trusts?
Revocable Trusts
A revocable trust is one that the settlor retains the right to amend or revoke until a certain event (usually the settlor’s death). Most trusts are revocable to give the settlor the most flexibility, as beneficiaries and the way assets are distributed can be changed based on changes in the settlor’s life.
Testamentary Trusts
A testamentary trust is one that is created under a person’s will and only takes effect after they die. Some trusts, such as a qualifying special needs trust (a trust created for one’s spouse to prevent Medicaid disqualification), should only be established by testamentary trust due to federal and state law.
Irrevocable Trusts
An irrevocable trust is one that cannot be amended or revoked by the settlor, though there are steps that can be taken to permit some modification, like nominating a trust protector (a third party who makes sure the trust is administered according to the settlor’s wishes and can exercise certain powers given by the settlor) who can change beneficiaries based on certain circumstances.
Still have questions about trusts in Florida? Visit our Trusts FAQ or click below to schedule a free consultation with a Gainesville trusts attorney today.
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Michael Merhar is a Gainesville wills, trusts, and estates attorney helping people throughout North Central Florida create tailored estate plans that preserve legacies and minimize headaches. If you would like help creating a personalized estate plan or updating your existing plan, please reach out to schedule a free consultation.