Orlando Trust Attorney

As leading estate planning attorneys in Orlando, we have helped countless clients achieve financial security with expert estate planning strategies and tools, including trusts. Schedule a free consultation with our law office to explore the full range of your legacy planning options. 

When it comes to estate planning, there is no one-size-fits-all approach that you can effectively apply. To meet your distinct needs, goals, and circumstances, you need to develop a custom-tailored estate planning strategy. Fortunately, you don’t have to do it alone — an experienced Orlando estate planning lawyer can help you find the right tools for the job.

One of the most popular and versatile estate planning tools is the trust — a legal arrangement that allows an individual to hold and manage certain assets for the benefit of their designated beneficiaries, family members, and loved ones. Commonly used to avoid probate and safeguard inheritance from potential creditors, trusts are increasingly popular in the world of estate planning. However, it’s important to understand that they come in many different forms, each of which has its own distinct benefits and potential drawbacks.

If you are interested in designing a comprehensive estate plan, you will definitely want to explore trusts. However, successfully navigating their complexities often requires hiring expert legal services. Don’t worry — the William C. Roof Law Group is here to help. This article will explain everything you need to know about trusts, including different types, advantages, disadvantages, trust creation, and more.

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What Are Trusts?

In simple terms, a trust is a legal arrangement where one party, typically called the grantor or settlor, transfers assets to a trustee, who holds and manages them for the benefit of designated beneficiaries. They are essential tools in estate planning, offering many potential benefits to their users, including the ability to avoid the probate process.

Advantages of Trusts

The benefits or drawbacks associated with any estate planning tool are highly dependent on an individual’s unique circumstances and financial goals. That being said, people typically gravitate toward trusts for few specific reasons, including the following potential advantages:

 

  • Avoiding probate court. Assets held in a trust generally bypass the probate process, offering time-savings, cost-savings, and more privacy to beneficiaries.
  • Asset protection. Some types of trusts protect assets from creditors and legal claims, preserving them for the intended beneficiaries.
  • Tax planning. Certain trusts offer potential tax planning benefits, including reduced estate and gift taxes, allowing individuals to manage their tax obligations more efficiency.
  • Greater control. Trusts allow the grantor to set specific terms and conditions for the distribution of assets, providing greater control over how and when beneficiaries receive their inheritance.

Trusts are a versatile and powerful tool in estate planning. They offer numerous potential benefits, including probate avoidance and the peace of mind that comes with knowing your loved ones, minor children, and beneficiaries will be provided for. However, they also come with potential downsides, depending on your specific goals and financial situation.

Disadvantages of Trusts

Before diving headlong into trust creation, it’s important to understand that the advantages they offer depend on various factors. Here are a few of the potential disadvantages of trusts:

 

  • Complexity and cost. Trusts are more expensive to create than a last will and testament, and the legal fees required to draft them, as well as the actual asset transfers to fund them, can be substantial. Due to their complexity, they typically require ongoing management and administration.
  • Potential tax implications. Certain types of trusts carry complex tax implications. For example, irrevocable trusts may have their own tax identification number and be subject to different rates than individual taxpayers.
  • Funding. To function as intended, a trust must be property funded. Transferring certain assets, including real estate, bank accounts, and more, can be a time-consuming and costly process that requires a great eye for detail.

For these reasons and more, it’s critical to solicit legal advice from an Orlando estate planning attorney before creating a trust or any other potentially complex estate planning tool.

Common Types of Trusts

In the State of Florida, individuals can use various types of trusts to meet different estate planning needs. Each type of trust comes with its own potential advantages and disadvantages, which is why it’s important to ensure your chosen trusts align with your greater estate planning goals. Here are a few of the most commonly used types of trusts in Florida:

 

  • Revocable living trust. The revocable trust can be altered or revoked at any time, allowing the grantor to retain control over the assets while they are alive. Although it typically avoids probate, a revocable trust doesn’t offer as many tax advantages as certain other trusts.
  • Irrevocable trustAfter establishing and funding an irrevocable trust, the grantor cannot modify or revoke it, as the assets placed in the trust are no longer considered part of the grantor’s estate. Because they are not part of the estate, irrevocable trusts can reduce the grantor’s overall tax burden and protect assets from creditors.
  • Testamentary trust. Created through the terms of a will, a testamentary trust only takes effect upon the grantor’s death, distributing assets according to the will’s instructions.
  • Special needs trust. The special needs trust is designed to provide a beneficiary with special needs the funds they need without disqualifying them from receiving essential government benefits and assistance.
  • Charitable trust. Designed to benefit a charitable organization or cause, these trusts are an effective way to create a lasting legacy while maximizing tax benefits.
  • Asset protection trust. Asset protection trusts help protect the grantor’s assets from creditors, while still allowing the grantor to benefit from the assets.
  • Spendthrift trust. Spendthrift trusts protect a beneficiary’s inheritance from creditor claims and their own reckless spending habits by issuing funds on a schedule designed by the grantor.
  • Qualified personal residence trust (QPRT). The QPRT allows a grantor to transfer a personal residence into the trust while continuing to live in it for a specified period, reducing the taxable value of their estate.
  • Dynasty trust. A dynasty trust is created to last for multiple generations, focusing on long-term wealth preservation and minimizing estate taxes.

Each of these trusts serve a distinct function and may or may not be ideal for your situation. If you are interested in exploring any of these trusts, an experienced trusts attorney in Orlando can help you understand their various benefits and implications, ensuring they align with your primary objectives.

How to Create a Trust in Orlando, Florida

Trust creation requires expertise in Florida law and estate planning, which is why most people choose to work with a dedicated trusts lawyer throughout the process. The attorneys at William C. Roof Law Group have established countless trusts for clients in Central Florida by following these key steps:

 

  • Determining your goals. Understanding your reasons for creating a trust can help us select the right tool for the job. It’s important to consider factors such as probate avoidance, the needs of minors and beneficiaries, asset protection, and tax planning.
  • Choosing the best type of trust. After we have a clear picture of your financial circumstances and goals, we will help you select the best type of trust to meet your needs.
  • Selecting a trustee. We can help you appoint a trustee, the person who will be responsible for trust administration, including managing and distributing your assets according to your wishes. Whereas grantors can sometimes serve as their own trustees, certain types of trusts require the appointment of a third-party trustee.
  • Drafting the trust document. Our legal experts can help you draft this legal document, outlining important terms, such as the trustee’s powers and duties, the trust’s beneficiaries, and the distribution plan for assets.
  • Funding the trust. After your trust is created, we will help you fund the trust, which is the process of transferring assets into it. These assets can include real estate, bank accounts, investments, personal property, and more.
  • Signing the trust. Our trust attorneys will arrange for you to sign the trust document in the presence of a public notary and witnesses, as required under Florida law, ensuring you maintain legal compliance.
  • Maintaining and updating the trust. Our legal team will regularly review and update your trust to reflect your changing needs and circumstances, such as the birth of children, marriage, divorce, or a significant change in financial situation.

Establishing an effective trust is a more involved process than most people realize. Even after being created, a trust requires maintenance, which is why many people choose to work with a dedicated estate planning lawyer throughout the process.

William C. Roof Law Group: Top Estate Planning Attorneys in Central Florida

Although extremely useful under the right circumstances, trusts are only one aspect of thorough estate planning. A comprehensive estate plan is a synthesis of various tools and approaches that require specific legal expertise. The good news is that you don’t have to be an estate planning expert to secure your legacy — you just need to partner with one. Schedule a free initial consultation with our law firm to start exploring your options today.

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