Seven Kinds Of Trusts In Florida

The seven most common kinds of trusts in Florida have different specific purposes. But the overall purposes are the same. In most cases, trusts transfer legal ownership of money or other property while leaving the original owner in complete control of that property. Furthermore, property in trust is exempt from the probate process, saving money and preserving privacy.

Because so many choices are available, a partnership with an Orlando estate planning lawyer makes a big difference. An attorney carefully considers your needs and goals before recommending a kind of trust. Chances are, regardless of those needs and goals, the right kind of trust is out there somewhere.

Special Needs Trust

An SNT is ideal for people with disabled children who need lifelong care, from a visiting nurse to full-time institutionalization. The money in a SNT pays for such care and, since this money belongs to the trust and not the beneficiary, the beneficiary remains eligible for Medicaid and other need-based government benefits.

Florida law recognizes both first-party (funded with the beneficiary’s assets) and third-party (funded by someone else) special needs trusts.

Spendthrift Trust

STs are similar to SNTs in many ways, especially the purpose. An Orlando estate planning lawyer typically includes provisions in a spendthrift trust that protects vulnerable individuals, such as people with mental disabilities, from unscrupulous people who want to claim that money for themselves.

STs are also ideal when a settlor (person who creates a trust) wants to ensure that a financially irresponsible beneficiary receives long-term support without risking loss of assets.

Charitable Trusts

These trusts, which usually contain real property and benefit charitable organizations or causes, come in two different forms in the Sunshine State.

A charitable lead trust (CLT) often immediately transfers the property to the beneficiary. Another person or entity, usually the previous owner, often collects the income produced from that property until his/her death. Charitable Remainder Trusts (CRTs) take the opposite approach. The beneficiary collects the income and takes title to the property upon  the settlor’s demise.

Asset Protection Trust

The classic trust shields the property in the corpus (property in the trust) from creditors. Since the settlor and trustee (person who manages the trust) are the same person, at least in most cases, the transition is mostly a legal fiction. The main difference is that, as a trustee, the manager has a fiduciary duty to manage the corpus for the benefit of the trustee.

Land Trusts

These trusts are similar to APTs in many ways, except, wait for it, land trusts are designed exclusively for real property. Typically, the trustee has a life estate, and then title transfers to the beneficiary.

Credit Shelter Trust

Married couples typically use credit shelter trusts, also known as bypass trusts or AB trusts, to minimize estate taxes by utilizing both spouses’ estate tax exemptions. It’s an irrevocable trust established upon the death of one spouse, designed to hold assets up to the applicable estate tax exemption and benefit the surviving spouse.

Generation Skipping Trust

GSTs pass contributed assets to the settlor’s grandchildren. They “skip” the next generation, the grantor’s children. The assets avoid estate taxes that would apply if the children directly inherited them because they’re only taxed once.

Generation-skipping trusts can be effective wealth-preservation tools for individuals with significant assets and savings.

Connect With a Detail-Oriented Orange County Lawyer

Comprehensive estate plans address issues that affect the living and the dead. For a confidential consultation with an experienced guardianship lawyer in Orlando, contact Gierach and Gierach, P.A. The sooner you reach out to us, the sooner we start working for you.

Source:

americanbar.org/groups/real_property_trust_estate/resources/estate-planning/probate-process/