Not Everyone Needs A Trust, But Do You?

You come from a sufficiently privileged background that, when you transferred from private school to public school, your new classmates called you a trust fund baby, but you never thought much about what it meant. It was enough, though, to leave you with the impression that trust funds were something that only rich people had. Now that you are working on your estate plan, it is clearer to you than ever before that you are not rich, and at your age, you probably never will be. Why, then, does your estate planning lawyer keep trying to convince you to establish a trust? Sometimes your lawyer makes it sound like setting up a trust is the only reasonable option, and the only meaningful choice is whether the trust should be revocable or irrevocable. To find out more about whether a trust would simplify your estate plan, contact an Orlando estate planning lawyer.

Reasons to Establish a Trust

A trust is a legal entity with its own taxpayer identification number; in this regard, it is similar to a business or a charity. The trust and its financial affairs are legally separate from those of the grantor, the person who set up the trust. In other words, when you set up a trust and transfer money to it, the money no longer legally belongs to you. Instead, the money belongs to the trust. You set the rules about what happens to it by writing a trust instrument, but after you sign the trust instrument, the matter is out of your hands. The trustee, who is the person or law firm authorized to make transactions with the trust assets, simply follows the instructions in the trust instrument.

The main reason for establishing a trust is that it does not go through probate. The assets in the trust pass directly to the beneficiaries, without the involvement of the courts. These are some reasons that people choose to establish a trust:

• The grantor has been married more than once and wants to prevent inheritance disputes between his children from his first marriage and his new spouse.
• A family member of the grantor cannot become financially independent due to a disability, and the grantor wants to ensure that the disabled family member continues to receive financial support after the grantor dies.
• Given that the proceedings of the probate court are a matter of public records, the grantor establishes a trust to prevent the public from finding out about his or her financial affairs.
• The grantor wants to save money on taxes associated with probate and to protect his or her assets from creditor claims.

Even if you establish a trust, you should still write a will. The probate of your remaining estate will be simple if most of your assets legally belong to a trust instead of to your estate.

Contact Gierach and Gierach About Simplifying Probate With a Trust

An estate planning lawyer can help you draft your trust instrument and other estate planning documents.  Contact Gierach and Gierach, P.A. in Orlando, Florida to discuss your case.

Source:

leg.state.fl.us/statutes/index.cfm?App_mode=Display_Statute&URL=0700-0799/0736/Sections/0736.1106.html