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Trusts come in many different forms. Different types of trusts are useful for accomplishing different goals. Some are better suited for protecting your assets from probate and estate taxes, some help to ensure you are financially protected during your elderly years, and others are useful in providing for loved ones while you are still living. Below, we discuss several of the more common kinds of trusts that are used by Floridians and the purposes for which they may be useful. For help planning for your long-term care and the future of your loved ones, reach out to a knowledgeable West Palm Beach Elder Law, Special Needs and Estate Planning Attorney.
A living trust, also known as an “inter vivos” trust, is a trust created while the grantor (the person who provides the funds or other property to the trust) is still alive. The trust is established to house assets, which are maintained and overseen by a trustee, on behalf of the beneficiary. The trust is “revocable” because the grantor can change the terms of the trust or revoke the trust and take back the trust assets at any time. Typically, revocable living trusts are used to dispose of assets without having to go through probate. Your estate planning advisor may suggest you place assets in a trust rather than utilizing a will to pass your estate on to your loved ones.
Irrevocable trusts are trusts that wrest control of the property away from the grantor. Once assets are placed into the irrevocable trust, they are no longer the property of the grantor, nor are they the property of the beneficiary. They are the property of the trust. Irrevocable trusts are also quite useful for estate planning, as they can be used to pass property to beneficiaries without going through probate and without incurring probate or estate taxes. Irrevocable trusts can also be used to put assets outside the hands of creditors or provide for a beneficiary without actually giving control of those assets to the beneficiary (such as if a beneficiary has poor financial management skills).
There are several special types of irrevocable trusts for particular purposes. Medicaid Asset Protection Trusts can be used to house assets and provide for your own needs while preserving your eligibility for Medicaid or Medicare. An irrevocable Special Needs Trust can likewise provide for the needs of an individual with special needs without raising their income or net worth above the limits for needs-based governmental assistance programs. Special Needs Trusts can be established for the benefit of a loved one (third-party trust) or the benefit of the person funding the trust (first-party or self-settled trust).
A testamentary trust is a trust that goes into effect upon the death of the grantor, typically as dictated in their will. They are useful when someone wants to transfer assets to a beneficiary but wants to set additional conditions for receipt of trust assets. Testamentary trusts are irrevocable.
An experienced and thorough West Palm Beach estate planning attorney can help you and your family plan appropriately for the future for you and your family. If you are in need of a professional, meticulous Florida asset protection and elder law attorney, contact the West Palm Beach elder law and estate planning attorneys Shalloway & Shalloway at 561-686-6200.