Should You Create a Will or Trust?
Like a will, a trust can ensure your final, end-of-life wishes are known to your loved ones and are carried out. You can select a trustee to manage your estate, and your trust will lay out details on who will receive your assets and when. One big difference, however, is that a will only goes into effect after you pass away, yet a trust is effective the moment you sign it and fund it (when you transfer assets to it) while you are still alive.
Trusts are more complex than a will but there are several advantages to a trust over a simple will. For example, a trust offers greater control over when and how your assets are distributed and can help you avoid probate court after you pass away.
There are many different types of trusts, but the two main types are revocable and irrevocable trusts. Revocable trusts are just that – they can be revoked while you are still alive. Having a revocable trust allows your heirs to avoid the probate process after you die and provides a means for the distribution of your assets and the proper management of your assets while you’re alive if you become incapacitated by illness, injury or dementia.
RTRLAW can help you create a revocable trust, where you would name a trustee who will manage your assets should you become incapacitated and even after you pass away. The trustee is responsible for and must provide accountings to all beneficiaries and is required to disburse the trust according to your wishes. A trust can be used to distribute your assets to your children, grandchildren, and to future generations of your family.
In addition, you can put assets in a protective trust if you have a child or beneficiary who is not mature enough to handle the assets or is disabled. Your trust can also make provisions to give gifts to charities or other organizations.
Furthermore, with proper planning, you can take advantage of certain tax benefits and potentially pay fewer attorney fees than the fees one might need to pay to probate an estate.
One drawback to a revocable trust is that all of the assets contained in the trust are fully countable as assets for Medicaid qualification purposes. So in the event that you need to apply for Medicaid to pay for a nursing home or long-term care, you may not qualify based on the amount of assets in your revocable trust. The only way to preserve your assets and potentially still qualify for Medicaid should you need it if you become ill or incapacitated, is to create an irrevocable trust.
RTRLAW can help you create an irrevocable trust that will protect your assets from creditors and provide a way to transfer your assets to your beneficiaries, maximize tax benefits and help you plan for Medicaid qualification should you need it later in life for long-term care.
One of the main issues with an irrevocable trust is that you cannot revoke or change it. With an irrevocable trust, you will relinquish all control over your assets, typically to an adult child or trusted member of your family. An irrevocable trust can be set up so that you (as the grantor) can continue to receive income from the trust to maintain your lifestyle and cover emergency expenses, or, if the income is not needed, to accumulate in the trust to pass along to your heirs. This type of trust works well for older people who have considerable assets and are ok with a loved one managing those assets (or perhaps who will inherit the assets after your death).
Our attorneys can meet with you at one of our seven convenient offices in Florida, including Fort Lauderdale, Orlando, Tampa, Kissimmee, Lake Worth, Miami or Jacksonville.