1. Estate Administration Becomes Less Stressful
Creating a Trust helps in making the Estate Administration process much simpler and economical for your loved ones. With proper trust planning, the probate process can be skipped in its entirety on many occasions. Trust Administration involves the process of fulfilling the trust creators’ demands/plans when the trust creator either becomes incapacitated or has died. Once a trust is created, the trust creator defines how his/her assets will be distributed upon their passing. This helps to make the process of estate administration less stressful with the removal of ambiguity and elimination of conflict between the family.
2. Designate Who Will Care for Your Children if You and Your Spouse Pass
If you have any children below the age of 18, it is important to appoint a trusted friend or family member as a designated preneed guardian to have custody of your children if something were to happen to you and your spouse. Without designating who you want as a guardian of your minor children, unfortunately, that decision would be left to the discretion of the court which may not mirror your wishes for your children.
3. Ensure Your Children are Provided for Financially
Trusts are often created to protect the financial future of children and grandchildren. Before you die, you can leave instructions to create a Trust for the benefit of your children with financial distribution terms set by you. By keeping the finances and assets for your minor children (and even financially immature young adults) in a Trust will keep that money secure and make sure it is available to your children when they need it. Most Trusts for children and grandchildren include distribution terms for the child’s health, education, maintenance, and support until they become of age to handle their own affairs.
4. Provide for Beneficiaries Who Are Not Your Biological Children
If you want to ensure that your dependents, stepchildren, or nieces/nephews are treated in the way you want, it would be critical to create a Trust for them. A Trust allows you to have greater control over what happens after your death to your money and properties. If you have remarried, you can decide what amounts you choose to give to your own kids, dependents, and stepchildren, and how and when those amounts will be transferred to them. This particularly becomes an issue with blended families when oftentimes that could have been avoided with proper planning.
5. Protect Your Partner
Common-law marriage is not recognized in the State of Florida. If you have an unmarried partner or someone you have been cohabitating with for a number of years, neither of you will inherit from each other under Florida’s intestacy laws. The intestacy law will determine where your property goes after your death, and it will not go to an unmarried partner. You can use a Trust to leave assets for your partner to ensure they are protected after your passing. The trust carries out the same purpose as a will but helps the surviving partner to escape the difficulty and cost of probate.
6. You’ve Recently Tied the Knot
If you’ve recently tied the knot, it is important to plan for your spouse’s future before you die. Creating a trust after getting married not only provides your spouse with a financial resource, it also ensures that your assets are ultimately distributed according to your wishes. Taking such a step after marriage is important.
7. Ensure Your Pets Are Cared For
A Trust formed for your pets describes how your animal friends will be cared for and looked after financially if you pass away, or if you are ill or disabled and can no longer take care of them yourself. You can appoint the caregiver as a Trustee to look after the pets in accordance with your wishes and even set aside money to help pay for food, toys, and vet bills. It will also help you set up your pets’ life-care treatment and any burial or cremation arrangements you would prefer once your pet passes. Certain animals such as parrots and tortoises can live for over a hundred years and oftentimes have to be sent to a shelter after they outlive their prior owners without proper planning.
8. Safeguard Your Family Home
In order to keep your family home safe for your children or loved ones, it is important to create a Trust to secure it. In this way, a Trust can help to hold the house for your children or loved ones giving them the right to live in that house or providing them a share in the house. The house will also be protected from personal liabilities.
9. Disinherit Individuals
It is a good choice to establish a Trust if you wish to disinherit any individual or leave unequal amounts to your heirs. This will help to prevent the transfer of your assets to someone you dislike or for some reason do not want them to take control of. A lot of people want to exclude others from their estate plans. If this is your decision, using a Trust is a wise choice.
10. Prevent Family Disputes
Creating a Trust can help in avoiding family disputes. Being clear about your wishes beforehand will prevent any future family conflicts. With unclear wishes and improper estate planning, conflicts may arise and families can convert into common enemies. Forming a Trust will also help to avoid any future estate litigation. It removes the chance that in future, your heirs and beneficiaries will be fighting it out in court over your assets.
11. Choose Who You Would Like to Settle Your Affairs
When you agree to create a Trust as part of your estate planning, you will then have to choose who will help implement your plans. The trustee will be in charge of supervising your assets and the property for your loved ones, depending on the form of trust that you create. Your choice of trustee should be someone who is likely to be around for a long time, and who has the time to focus on trustee duties.
12. Prevent a Lengthy, Costly Probate Process
Creating a Trust can help to prevent the probate process by transferring properties to the trustee during your lifetime. It removes the need to make the transfer after your death using the probate process. The trustee has absolute authority to manage the trust assets upon your death; a court appointment is not required. The probate process is very lengthy and forming a Trust can prevent you from this process.
13. Support a Charity
Millions of people annually donate money to help the causes they believe in and for the positive impact it has on their own lives. A Trust can be formed to help a charitable cause that you support. The trust and all the assets within will go to the charity upon your death. It allows the right to lower the taxable estate and leave a lasting legacy behind it.
14. Protect your Digital Assets
Digital assets are a person’s digital rights and properties, including email, text messages, cloud storage, website accounts, financial accounts, music/publishing rights, and accounts for social media. A trust may be created to protect digital assets that allow the trust creator to put existing digital rights and property into a trust for the trust beneficiaries to use. You may also outline your wishes that you want the digital assets to be destroyed after your death.
15. Avoid Paying More Inheritance Tax Than Necessary
A Trust is considered one of the most valuable estate planning tools which helps to reduce any unnecessary taxes. It also helps to reduce estate taxes for those individuals who are subject to federal estate taxes. The creator of the Trust can have the benefit of any income tax liability from the income retrieved from the assets. With the help of a professional attorney, you can minimize taxes by forming a Trust.
If you have any questions after reading this article, please give us a call for your FREE consultation. You can consult with an experienced Finity Law firm attorney to help you handle your situation better, without compromising your resources and benefits.