New Year's Resolution: Protect Your Assets with Estate PlansJanuary 3, 2022 | Category: Estate Planning in Florida
Asset Protection in Florida: Setting up a Trust
Trusts are arguably the most popular form of asset protection. There are different kinds of trusts that can be set up and you need to be aware of which ones protect your assets - because not all do. As an example: revocable living trusts in Florida will allow for someone to carry on your financial matters in the event you are mentally incapacitated, and in the event of your death, it will most likely enable your estate to avoid being probated (there are extenuating circumstances such as individual state laws which require a probate proceeding to obtain state estate tax waivers, cut off creditors’ rights, secure a homestead determination for a primary residence, and/or limit the time that a challenge can be made to the trust.) By avoiding probate, a revocable trust keeps all your financial matters private, out of the public record. However, probate can only be avoided if your trust is fully funded – if all your assets have been properly re-titled and your insurance policies kept up to date with beneficiary designations. A revocable living trust, in contrast, does NOT protect your assets from creditors during your lifetime. For that, you need to establish an irrevocable trust in Florida. An irrevocable trust can be created by signed agreement or it can be established according to the terms of a revocable trust upon the death of the trust maker. There are many forms an irrevocable trust can take. The primary uses for an irrevocable trust as part of your estate planning is to reduce estate taxes, protect your assets and provide for charitable giving.
A revocable trust is not for your asset protection, but for succeeding generations. However, if you transfer assets into an irrevocable trust, you are giving over those assets to the trustee and beneficiaries of the trust so that you no longer own the assets. Therefore, they are asset protected and are not subject to estate taxes when you die, because you no longer own them.
To keep your assets from being taxed or having to go through the Florida probate process, you need to have a plan in place. Our estate planning attorneys are well versed in Florida estate planning laws and we can help you in making sure your most valuable assets are protected.
Call us today to schedule a complimentary consultation at 800-705-5457.