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Trust Lawyer Jacksonville, FL

Owenby Law, P.A. Is Ready to Guide You Through the Process

Sometimes a simple will is not enough to accomplish the wishes of a testator with regard to his or her estate. For instance, if the parent of a minor child dies before that child reaches adulthood, typically the other parent will assume all responsibility for that child. But what happens if both parents are killed in the same accident and the child is left parentless? Jacksonville estate planning lawyers will often form a trust or multiple trusts to achieve things that a will cannot. We at Owenby Law, P.A. can help you establish a trust that reflects your specific wishes.

The Basic Concept of a Trust

While there are many terms associated with trusts (testamentary, living, revocable, irrevocable, etc.), the basic concept involves the grantor selecting a third party, either the fiduciary or trustee, to manage funds for a beneficiary. For instance, a parent may select an uncle to manage a child's funds until he or she is old enough to take on the responsibility. The uncle is not able to use the funds for his personal needs.

The trust is used to meet the child's requirements, such as:

  • Education
  • Medical expenses
  • Transportation

Although the concept of a trust is simple, the documentation required to execute one should be prepared by an experienced attorney who is familiar with probate and estate planning. Our firm has more than 20 years of experience in establishing trusts for Florida clients.

Common Types of Trusts

Here are some common types of trusts:

  • Revocable Trust (Living Trust): This type of trust is created during the grantor's lifetime and can be altered or revoked by the grantor. It's often used to avoid probate and provide flexibility in managing assets during the grantor's lifetime and after death.
  • Irrevocable Trust: Unlike a revocable trust, an irrevocable trust cannot typically be changed or revoked once it's established. Assets placed in an irrevocable trust are usually shielded from estate taxes and can provide asset protection from creditors.
  • Asset Protection Trust: This type of trust is designed to protect assets from creditors and lawsuits. It's often established in jurisdictions with favorable asset protection laws. The grantor may retain some control over the assets while still safeguarding them from potential claims.
  • Charitable Trust: A charitable trust is established to benefit one or more charitable organizations. It can provide the grantor with tax benefits during their lifetime or for their estate while supporting charitable causes.
  • Special Needs Trust (SNT): This type of trust is created to provide for individuals with disabilities without jeopardizing their eligibility for government benefits such as Medicaid or Supplemental Security Income (SSI). The trust is managed to supplement, not replace, government assistance.
  • Testamentary Trust: Unlike most trusts that are created during a person's lifetime, a testamentary trust is established through a will and only takes effect upon the grantor's death. It allows for the management and distribution of assets according to the grantor's wishes.
  • Generation-Skipping Trust: Also known as dynasty trusts, these trusts allow assets to be passed down to future generations without incurring estate taxes at each generational level. They're commonly used to provide for grandchildren or future descendants.
  • Credit Shelter Trust (Bypass Trust): This type of trust is often used by married couples to maximize estate tax exemptions. Upon the death of one spouse, assets are placed in the trust to benefit the surviving spouse while minimizing estate taxes.
  • Grantor Retained Annuity Trust (GRAT) and Grantor Retained Unitrust (GRUT): These trusts allow the grantor to transfer assets to beneficiaries while retaining an income stream for a specified period. They're often used for estate tax planning.
  • Qualified Terminable Interest Property (QTIP) Trust: This trust allows a grantor to provide for a surviving spouse while maintaining control over how assets are distributed upon the spouse's death. It's commonly used in blended families or situations where there are concerns about asset management after the grantor's death.

Determining which trust is right for you requires careful consideration of your individual circumstances, goals, and preferences. Consulting with an experienced estate planning attorney or financial advisor is essential to navigate the complexities of trust planning. Our Jacksonville trust lawyers can assess your needs, discuss the advantages and limitations of each type of trust, and tailor a solution that aligns with your objectives. By collaborating with our team and taking the time to explore your options, you can make informed decisions to protect your assets, minimize taxes, provide for loved ones, and leave a lasting legacy according to your wishes.

What Are the Benefits of Establishing a Trust?

A trust can serve several purposes. For instance, assets that are placed in a trust will not be subject to probate. By avoiding probate, your family and loved ones will not have to deal with the process of petitioning the court to take care of your estate. Also, by not having to probate an estate, a trust can provide a great deal of privacy as your estate plan is contained in the trust rather than a will, which would be subject to probate.

Some additional benefits of having a trust include:

  • Upon your passing, a trust can terminate and the remaining trust property can be distributed per your instruction.
  • Generally, a trustee would be responsible for managing the trust property, but you can designate yourself as trustee.
  • Should you become incapacitated, you can name a successor trustee to manage your financial affairs.

The Difference Between Trusts & Wills

Any property not in a trust can be disposed of in accordance with a will. The property disposed of by a will must be probated. Probate effectively transfers title of property from a decedent to a beneficiary, and the will designates which beneficiary receives what property. If you are unsure of how you want certain tangible property to be disposed of, a Separate Writing Memorandum can be completed after your will. However, it is important to remember that the list prepared in the Separate Writing Memorandum would not constitute a will or codicil to a will.

What Are the Tax Implications of Trusts?

Inheritance and estate taxes can be onerous. In addition to being a useful tool to estate planners, certain types of trusts can be used to legally shelter assets. With a living trust, the principle is transferred to the beneficiary while the grantor is still alive. Because of this, these assets are not taxed in probate. Owenby Law, P.A. can explain the various types of trusts and their tax implications. In addition, we can help you determine whether the trust that you establish should be revocable or non-revocable and the tax implications associated with this decision as well.

Steps to Setting Up a Trust

  • Decide how you want to set up the trust
  • Create a trust document
  • Sign and notarize the agreement
  • Set up a trust bank account
  • Transfer assets into the trust
  • For other assets, designate the trust as beneficiary

Want to learn more about the process of establishing a trust? Call a Jacksonville estate planning attorney at Owenby Law, P.A. at (904) 770-3141.

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