Many Floridians hate thinking about their own mortality. This is completely natural. Yet, considering our ultimate demise is important when it comes to estate planning. After all, those who fail to figure out how to address their assets and debt in the event of their passing may wind up leaving their loved ones with unexpected probate costs. Also, if they fail to plan, then they may be unable to have their assets passed down in accordance with their wishes.
To avoid this, many individuals turn to popular estate planning tools. Amongst these tools are trusts. In the most basic terms, a trust is created when an individual transfers property to a trustee who is then responsible for managing those assets and distributing them in accordance with the creator’s wishes. The recipient of these disbursements is the beneficiary. The trustee, who may be the creator him or herself, must live up to this fiduciary duty of holding assets in trust for disbursement to the beneficiary.
Generally speaking, there two types of trusts. The first, known as a testamentary trust, only transfers property to the trust upon an individual’s death. It is worth noting that these kinds of trusts are usually included in wills so that there is no confusion as to how it is meant to be managed and used. The second type of trust is the living trust. Here, the trust is created during an individual’s lifetime, then continues after his or her death. These trusts can help avoid probate and may be rendered revocable or irrevocable by their creators.
This is a very simplified look at some of the basics of trusts. There are numerous different types of trusts that all have different purposes and advantages. Therefore, before creating a will or trust, Floridians should consider discussing their estate planning goals with an experienced legal professional, like those at our firm.