A Florida revocable living trust is a revocable agreement that a resident makes during their lifetime for the benefit of themselves and a spouse and other designated people after their death. A living trust is usually used for testamentary estate planning and avoiding probate. Many people put off estate planning until it’s too late. They may feel like it’s only for wealthy people, that it’s too confusing, or just find it hard to think about death. But everyone has an estate (even if it’s small), and estate planning isn’t all about death. With a living trust, you can control what happens to your property during both your lives and after you’re gone.
Testamentary Trusts
A testamentary trust is a trust that is established by the instructions contained in the last will. A trust is a fiduciary relationship that allows a trustee, who is a third party, to manage assets on behalf of the beneficiaries of the trust. A person’s will may include instructions to establish a testamentary trust so that the trustee can distribute the person’s assets to the beneficiaries outlined in the will. However, a testamentary trust is not created until after the person has passed away. Also, a will could have more than one testamentary trust.
Special Needs Trust
A special needs trust is a legal arrangement and fiduciary relationship that allows a physically or mentally disabled or chronically ill person to receive income without reducing their eligibility for the public assistance disability benefits provided by Social Security, Supplemental Security Income (SSI), or Medicaid. A grantor creates a trust and a trustee oversees the disbursement of assets from the trust. A beneficiary is a person for whose benefit the trust is established. The trust will supplement the beneficiary’s government benefits but not replace them.
Spendthrift Trust
A spendthrift trust is a trust designed so that the beneficiary is unable to sell or give away her equitable interest in the trust property. The trustee is in control of the managing the property. Thus, the beneficiary of the trust is not in control of the property and her creditors cannot reach those assets. Spendthrift trusts are usually made by a grantor who wants to leave property to a beneficiary but is worried that the beneficiary won’t use the property wisely or that he or she might get into trouble with creditors. A spendthrift trust ensures that some trust property can be made available to the beneficiary, without the possibility that the beneficiary could squander it all at once.
Irrevocable Life Insurance Trust
An ILIT (pronounced “eye-lit”) is a type of trust that is funded during your lifetime with one or more life insurance policies. It is irrevocable, which means that once you create an ILIT the trust generally cannot be changed or revoked; the terms of the trust agreement are pretty much set in stone. An irrevocable life insurance trust (ILIT) is created to own and control a term or permanent life insurance policy or policies while the insured is alive, as well as to manage and distribute the proceeds that are paid out upon the insured’s death. An ILIT can own both individual and second-to-die life insurance policies. Second to die policies insure two lives and pay a death benefit only upon the second death.
