Trusts are an important part of a comprehensive estate plan that offer a variety of benefits ranging from probate avoidance to ensuring a child with special needs is financially supported. Creating an estate plan that strategically uses the power of one or more Trusts can help preserve and protect your family’s financial security long after the Grantor (the person who establishes the Trust) passes. A Trust should always be established by an attorney who specializes in estate planning. These are complex financial and legal instruments; trying to create one from a “fill in the blanks” template on the Internet could have costly errors and ramifications for your beneficiaries. While there are many types of Trusts, following are three of the most common Trusts in Florida:
Revocable Trusts
Revocable Trusts allow the Grantor to protect their assets from going through probate, saving their beneficiaries and heirs from this stressful and costly court process. The Grantor is typically the Trustee and Beneficiary of the Trust, allowing them to maintain control of all financial decisions unless they become incapacitated. Since the Trust is revocable, the Grantor can make changes to the Trust if necessary. Once the Grantor passes away, the Trust becomes irrevocable and the assets can pass to the beneficiaries and heirs outside of the probate process.
Life Insurance Trusts
A life insurance Trust is a type of irrevocable Trust designed to own a life insurance policy. It’s not necessary to have a life insurance Trust if you own a life insurance policy, but it can be helpful. If an individual owns a life insurance policy, it may be subject to estate taxes. However, if a life insurance Trust owns the policy instead, it can avoid these taxes, providing the Beneficiary with the full value of the policy to help provide financial stability and pay expenses.
Special Needs Trust
If you are caring for a loved one with special needs, a Special Needs Trust can financially provide for that family member in the event you no longer can. If the individual with special needs receives government benefits and were to receive an inheritance, they would likely lose their benefits because they would have too much money to qualify. However, by placing the funds in a Special Needs Trust instead of an outright inheritance, the individual can still qualify for government assistance, such as Medicaid, and have the benefit of a financial cushion to pay for services that government benefits won’t cover.
At Huth, Pratt and Milhauser, we specialize in creating Trusts and estate plans that are customized to fit our clients’ needs. We are highly skilled at developing sophisticated solutions to minimize tax liabilities and maximize the assets that can pass on to your loved ones. Contact us today to learn how we can create or update your estate plan.
Huth, Pratt and Milhauser
Huth, Pratt and Milhauser is a boutique law firm that offers a wide range of legal services in the specialty areas of wills, trusts, estates, probate, guardianship, and related matters. The range of legal services that Huth, Pratt & Milhauser provides in these specialty areas includes planning, administration and litigation. The experience and skills of our attorneys and staff, coupled with our knowledge of applicable law, enable us to provide outstanding representation to our clients.
Although we are located in South Florida, we proudly serve clients throughout the country and around the world from our Boca Raton offices. We strive to provide superior and focused counsel in a timely manner and at a competitive price.
Huth, Pratt and Milhauser
2500 North Military Trail, Suite 460
Boca Raton, Florida 33431
Phone: 561-392-1800
2500 North Military Trail, Suite 460
Boca Raton, Florida 33431
Phone: 561-392-1800
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