Why Should You Use Trusts in Your Estate Plan?
Estate planning is all about controlling your assets. It offers control of your assets during your life as well as control of your assets after your death. The most basic way to establish this control is through a will, but for most people, the will needs to be followed by additional estate planning documents and tools. One of the most common is the trust. The trust can be very handy for individuals who want to control their assets.
The need for a trust is driven by the level of control you would like to maintain over your estate. The trust offers flexibility (and sometimes even a fair amount of creativity) over your estate that a will lacks.
A trust is a legal arrangement that entrusts a person’s property to a third party for handling on behalf of a beneficiary. The majority of trusts are set up to benefit a child, grandchild or charity.
Parents who establish a trust can designate certain funds to be held by a financial institution (the third party mentioned earlier) that will later be distributed to their heir. Some designate the time of distribution as the beneficiary’s 18th birthday (if they are a minor). Others want to ensure that their child or grandchild has a net of funds to fall back on throughout their adult life. This can inspire parents or grandparents to create trusts with distribution dates at certain points throughout their child or grandchild’s life. For example, the trust may make distributions (of specified amounts) on the beneficiary’s 18th, 25th, 30th, 40th and 50th birthdays. The distribution schedule is completely controlled by the “settlor” or the person who creates the trust.
The settlor even holds the control of designating the “trustee.” The trustee is the individual or organization that is responsible for managing the property in the trust on behalf of the beneficiary or beneficiaries.
If you would like to discuss how a trust could help you retain control of your assets and your estate, please get in touch with one of the experienced Florida estate planning attorneys at Elder Solutions Law Firm today to discuss which type of trust could benefit you.