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An Experienced Estate Planning Attorney Explains How to Establish a Trust in Florida

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An Experienced Estate Planning Attorney Explains How to Establish a Trust in Florida

February 15, 2023
Geoff Hoatson

Trusts are a critical component of an effective estate plan. There are different types of trusts for various purposes, and knowing what you want to accomplish with a trust before you establish one is vital. Below, we will discuss how to establish a trust in Florida.

At Family First Firm, we help our clients in Orlando, Florida, plan for their golden years while preparing to leave an enduring legacy for their families and loved ones. Read below to acquaint yourself with the processes and purposes for establishing a trust. Contact us today at (407) 574-8125 to schedule a consultation with our experienced Florida trust attorney team so you can explore your options.

Trusts are Established for Different Purposes

Before setting up a trust in Florida, you will want to identify your goals and prepare the right trust for your needs. You will then plan and coordinate with the appropriate people in mind. Two main types of trusts we prepare and their respective purposes include:

  • Family Fortress Trust (a type of irrevocable trust) – This estate planning tool protects Floridians and their families from the high expenses associated with nursing homes: Assets go into the trust, you wait five years, and then you seek to qualify for Medicaid.
  • Probate Protection Trust (a revocable trust) – This trust helps to keep selected assets out of the probate processes that often delay inheritances or jeopardize plans to pass them on to intended heirs. Instead, individuals are named as beneficiaries of a trust customized to an envisioned plan, bypassing threats from creditors or others who would seek to intercept the assets.

One or both of these trusts may apply to your family’s goals. Work with our experienced estate planning legal team to devise a plan that fits your unique needs.

People Involved in a Trust and Their Duties

A few parties are involved in creating and maintaining a trust, and sometimes one party will fulfill multiple roles per its purpose and strategy. The three parties are the grantor, the trustee, and the beneficiaries. In short, trusts transfer assets from the grantor to the trustee to benefit the beneficiary or beneficiaries.

The grantor (also known as the trustor or settlor) establishes the trust, usually in accordance with a strategic plan developed with the help of an estate planning attorney. The grantor transfers legal ownership of the assets to the trustee (a family member, a professional, or an institution) to benefit the beneficiary. Depending on the terms and purposes of the trust, the beneficiary may not have access to its assets for an extended period.

The trustee has a fiduciary duty to act in the interests of the beneficiary in managing the trust. They are liable for damages if they act contrary to the beneficiary’s interests. The trustee is often compensated for managing the trust. Sometimes the grantor may also be the trustee, in which case a successor trustee may be chosen to fulfill the trustee role upon the death or incapacitation of the grantor.

Creating the Trust Agreement

The trust agreement is a document created by the grantor, which states the purpose of the trust, prescribes special rules per its purpose, and names the trustee and beneficiaries. It may also identify successor trustees. Essentially, the trust agreement specifies the terms of the trust.

The trust agreement may include the placement of assets into the trust in some cases, but that vital step often must be performed separately from the creation of the trust agreement. Work with a knowledgeable Florida trust attorney to determine the terms and necessary steps for your trust(s). Preparing this document is essential in establishing your trust, but writing a trust agreement does not create the trust itself.

Funding the Trust

A trust only actually exists once it is funded with assets. Funding involves transferring the legal ownership of assets into the trust based on the strategy and terms of the trust agreement. The time(s) at which your trust(s) should be funded will depend upon several factors, including the strategy you discuss with your estate planning attorney and the characteristics of a given trust.

Revocable Versus Irrevocable Trusts

Trusts can be categorized in various ways. One crucial distinction is revocable versus irrevocable. A revocable trust allows the grantor to modify the terms and remove assets that have been placed into the trust. In contrast, an irrevocable trust does not allow the grantor to reverse decisions to place assets into the trust; the terms of the trust apply as soon as it is funded with an asset. The Probate Protection Trust is a revocable trust, whereas the Family Fortress Trust is an irrevocable trust.

Testamentary Versus Living Trusts

Another point of distinction between types of trusts is testamentary versus living. A testamentary trust only transfers the assets into the trust after the grantor has died, and these are associated with a Last Will & Testament. In contrast, a living trust (or “inter vivos” trust) is funded with assets (in effect, becoming a trust) while the grantor is alive.

Work With An Experienced Florida Trust Attorney at Family First Firm in Orlando

To set up a trust in Orlando, Florida, you should identify your goals and strategize with the guidance of our experienced legal team. Whether you seek to protect yourself from the high expenses associated with nursing homes or prevent inheritances from being compromised in a probate process, trusts are a powerful tool to help you plan effectively.

Every trust is unique, and you need to coordinate the strategy and terms to fit your cohesive estate plan. Contact our team of trust attorneys at Family First Firm today to schedule a consultation by calling (407) 574-8125 or filling out our online form.

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Copyright © 2024. Family First Firm - Medicaid & Elder Law Attorneys. All rights reserved.
The information in this blog post (“post”) is provided for general informational purposes only and may not reflect the current law in your jurisdiction. No information in this post should be construed as legal advice from the individual author or the law firm, nor is it intended to be a substitute for legal counsel on any subject matter. No reader of this post should act or refrain from acting based on any information included in or accessible through this post without seeking the appropriate legal or other professional advice on the particular facts and circumstances at issue from a lawyer licensed in the recipient’s state, country, or other appropriate licensing jurisdiction.
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