Trust Attorney in Miami
When you are considering your options for Estate Planning, a Last Will and Testament is still an essential piece of the total required documentation to ensure that a person’s wishes regarding the disposition of their property are enforced. But a Last Will and Testament is not the required centerpiece of an Estate Plan. Proper use of varying types of Trusts can result in many lifetime and post-death benefits. During life, a Trust can be an essential tool to minimize the exposure of one’s assets to the jurisdiction of the Courts during a Guardianship proceeding and permit continued management of the assets during times of Incapacity. To achieve greater control over what happens to property and income not only following death but during life, the use of a Trust should be considered.
Wills vs. Trusts
Wills and Trusts are both documents that govern your assets.
A Last Will and Testament has no effect on the management or disposition of property and assets during life. Absent the inclusion of a Trust in the Last Will and Testament there is very little flexibility in a Last Will and Testament regarding the timing of distributions to Beneficiaries. If you have minor children, you can use a Last Will and Testament to appoint a Guardian for them in the event you are not survived by the other parent. Subject to legal entitlements of a spouse and dependents, you can use your Last Will and Testament to make, limit, or exclude the interests of various persons.
Trusts, on the other hand, can be established to have an effect on the management and disposition of property and assets during life. A Trust has greater flexibility than a Last Will and Testament regarding the timing of distributions to Beneficiaries. A Trust can be an alternative to a Guardianship of the property of a minor. Rather than subject the assets to which a minor would receive outright to Court supervision, placing the assets into the Trust can ensure minimized costs of administration, permit potential professional management, and limit the mandatory distribution of Guardianship property to the minor at the legal age of majority (18).
Trusts are additional planning techniques which can be used as a compliment to the Last Will and Testament or in some manner as an alternative to a Last Will and Testament. It permits for after-death continued management of the property and assets, generally without Court intervention, and permits more private dispositions of a person’s property and assets. It also avoids probate administration of the assets in the Trust.
A Trust can also provide for flexibility regarding management or distribution, permitting a continuing post-death opportunity to exert more control over how assets are used. For example, you can specify that a child cannot receive their inheritance before a certain age(s), or that a portion of it may only be used for educational costs.
A Trust permits continued management of the assets after the probate administration, a/k/a probate process. Rather than the property and assets which are held in the Trust being distributed to the Beneficiaries, a Trustee is appointed to hold the assets for the benefit of the Beneficiaries. The Trustee manages and distributes the Trust property and assets pursuant to the terms of the Trust document.
A Trust that is established during lifetime or in a Last Will and Testament may and can also have tax benefits for heirs. Transferring assets into an Irrevocable Trust during your lifetime may result in long-term tax savings.
- Effective use of Trusts for Estate Planning or Tax Planning requires an Attorney with experience in all facets of the law. When funding the Trust, issues regarding the proper transfer and titling of all property and assets including cash, securities, real estate, or other types of investments can have an important consequence to the effective implementation of any Estate Plan. The Attorneys at the law offices of David Howard Goldberg, P.L. have experience with drafting and administering Trusts. They have litigation experience at both the Trial and Appellate levels with issues relating to the creation, administration, and distribution of Trusts. When drafting, the years of experience gained in the litigation of such issues permits the attorneys at the law offices of David Howard Goldberg, P.L. to be cognizant of potential issues which could and often do arise, and seek to, as best as possible under the facts, draft to prevent such issues from arising.
A Testamentary Trust is one that is established in a Last Will and Testament. This is a type of Irrevocable Trust and the named Trustee will be responsible for managing or distributing the Trust property and assets pursuant to terms contained in the Trust document. The ability to retain the property in the Trust is advisable to ensure the property and assets are used responsibly, when the Beneficiaries are minor children or young adults, disabled or incapacitated individuals or the Beneficiary is not financially responsible. To ensure professional management of the property and assets which are held for the benefit of Beneficiaries who are not financially sophisticated, has historically been and continues to be a sound reason to place property and assets in Trust.
Living Trusts (a/k/a Inter Vivos Revocable Trusts) are a flexible option. During the lifetime of the Settlor (the person who creates the trust), it may be revoked by the Settlor at any time. The most common planning technique with a Living Trust is to place assets in the Trust to be managed for the benefit of the Settlor during their lifetime, and then have such assets held in the Trust to be held or distributed from the Trust as designated by the Settlor. In the event the Settlor becomes incapacitated, then the Trustee named, should the Settlor become incapacitated, will act as Trustee during the incapacity. This may be deemed a Less Restrictive Alternative to the appointment and expense of a Guardian of the property after a Court determination of Incapacity. Upon death, the Trustee manages or distributes the property of the Trust per the directions in the Trust Document.
Frequently Asked Questions
What are the benefits of a testamentary trust vs. a Living Trust?
Property is never placed into a new legal entity so there are no lifetime administrative issues or costs.
What are the benefits of a living trust vs. a will?
The benefits derived from the use of a Living Trust include the potential decrease in administration costs after death by avoidance of probate on the assets of the Trust, potential avoidance of the appointment and expense of a Guardian of the property after a Court determination of Incapacity, potential retention of assets in Trust delaying distributions until time and conditions chosen by the Settlor and generally a succession of Trustee without Court intervention.
Upon your passing, the Trustee may and can be directed to pay any claims made against your Probate Estate or taxes owed either at the time of your death or Estate Taxes arising therefrom.
In addition, your assets may be distributed without Court intervention after providing sufficient reserves to pay any claims or taxes for which the Trust would be obligated to pay.
What are the disadvantages of a trust?
A Living Trust or any type of Trust may have some additional administrative costs that would not exist if the assets are titled in your name individually. These costs are usually marginal. Transfers to Irrevocable Trusts during life may constitute taxable transfers. However, with proper planning long-term tax savings can be achieved with the use of lifetime transfers to Irrevocable Trusts.
How can I establish a trust for my estate?
It is very important to consult a lawyer who is qualified and experienced in Estate Planning, Probate and Trust Administration, in addition to Probate and Trust Litigation before creating a Trust. Knowledge in all these areas permits a planner to see an issue from all areas not just one side and plan for problems of all types. The Attorneys at the law offices of David Howard Goldberg, P.L. have experience with drafting and administering Trusts. They have experience at both the Trial and Appellate levels with issues relating to the creation, administration, and distribution of Trusts. When drafting, the years of experience gained in probate litigation of such issues permits the Attorneys at the law offices of David Howard Goldberg, P.L. to be cognizant of potential issues which could and often do arise and seek to, as best as possible under the facts, draft to prevent such issues from arising.