Trusts are legal documents used in estate planning. They play a huge role in helping you transfer your assets to your heirs, referred to as beneficiaries. Once you create the trust, you leave it to a person or an institution, also known as the trustee, for management and handing over to the beneficiaries. Some trusts are effective from the moment you create them while others become effective when you die. When properly designed, trusts ease the transfer of assets to the beneficiaries and also reduce the taxation rates on the assets. Although there are different types of trusts, the main ones in Florida are revocable and irrevocable.
Just as the name suggests, revocable trusts can be changed, altered or revoked. They are created during the life of the trust maker. Thus, the trust maker is the initial trustee. Additionally, the trust maker can change or remove assets from the trust. If you are avoiding probate, revocable trusts are ideal. However, once assets are transferred to revocable trusts, they remain with the trust maker’s creditors.
Irrevocable trusts, on the other hand, cannot be changed. Once an irrevocable trust is created, the trust maker loses any right to make additions or alter what is in the trust. However, once the trust is made, the trust maker can purchase survivorship life insurance. The insurance comes in handy for estate planning purposes.
Asset protection trust
This type of trust protects your assets from access from creditors. If you live in the United States, this type of trust can be made outside the country. The asset protection trusts are structured to insulate your assets for a duration of time.
Trusts are ideal ways to protect your assets. If you need to secure your assets through a trust, you may want to consult an estate planning attorney.