It’s a good idea to do any special needs planning you need to do as soon as you can. For example, you may want to set up a special needs trust for your child or another person with a disability. You may want to select a guardian or make preparations for when your child reaches adulthood.

One of the excellent tools you can add to your estate plan is a special needs trust for any settlements your child may receive. For instance, if you were all involved in a car crash that left your child with injuries or disabilities, you may want to set up the trust to hold those assets. 

Doing this can help your child remain entitled to any needs-based government benefits they receive without interruption. A special needs trust is specifically designed to provide long-term benefits to your loved one. The primary goal is to provide them with this additional support without threatening their right to public access programs that they may need now or in the future. Money put into a trust like this won’t count as assets and money disbursed from it in the proper fashion won’t count as income to your child, making it easier for them to qualify for Medicaid, Supplemental Security Income and other programs.

Our website has more on preparing your estate plan and how a special needs trust could offer benefits for your child or dependent in the long term. Speak with an attorney who understands special needs trusts and planning to learn more.

Suppose that you have an heir who is married to someone whom you worry might fritter the money you leave your loved one away. By placing the funds in a spendthrift trust, your beneficiary is protected from the free-spending whims of their spouse both during the marriage and also in the event of a divorce.

Preventing your heir from having direct access to the funds that you intend to leave them can also be useful if your beneficiary is in a field like medicine where they could face malpractice litigation or you’re concerned that they might face some other type of lawsuit. The trust is protected from such claims, so that may give both you and your beneficiary peace of mind.

If your intended beneficiaries are still children, you can fund a spendthrift trust for them, too. You have no way of knowing if they will be wise stewards of their resources as adults or fiscally irresponsible. Rather than rolling the dice on the decision, making a spendthrift trust part of your estate plan is a good way to protect the trust’s principal from potential profligate spending habits your beneficiaries could develop as they reach adulthood.

A Miami estate planning attorney can review your options with you to help you decide which type of trust will best serve your interests and those of your beneficiaries.

If you are interested in avoiding the probate process, creating a living trust could be very beneficial. Living trusts are entities that hold assets during a person’s lifetime. When the person dies, the assets are transferred to the designated beneficiary. The following are the top benefits of creating a living trust.

You will likely save money

Holding your assets in a living trust will mean that they will not be subject to probate fees at the end of your lifetime. If you have a large estate, probate costs can be huge, and these costs will be taken out of your loved one’s inheritances.

Your estate will avoid probate

Probate is not just costly; it can also be a very stressful process for a deceased person’s loved ones. This is why many estate planners want to be safe in the knowledge that their loved ones will not have to navigate the lengthy probate process before gaining their inheritance.

You will be able to plan for incapacitation

You can designate a person as a successor trustee who will be able to step in and manage your affairs if you become incapacitated.

If you are starting to plan your estate, you should make sure that you have a good understanding of the different estate planning strategies so that you can take informed action.

With living trusts, there are a few different designs that might work for your estate. There are:

• Irrevocable life insurance trusts
• Special needs trusts
• Spendthrift trusts
• Irrevocable trusts
• Revocable trusts

Each of these has its own purposes. For example, an irrevocable life insurance trust is designed to hold your life insurance policy when you pass away. Since that money goes into a trust directly, it may not be counted for the purpose of estate taxes, saving your estate money if you may have owed.

Similarly, a spendthrift trust might be a good idea if you have a beneficiary who isn’t particularly good with money. The spendthrift trust allows you to appoint a trustee who has discretion over the assets. They’ll dole out the funds under the appropriate conditions so that your beneficiaries don’t blow through an inheritance right away.

No matter what kind of trust you end up using, you’ll need to establish a trustee. In a revocable trust, you’re always in charge. For irrevocable trusts, you’ll need to choose a trustee who will manage the investments well, be able to deal with your beneficiaries and understand the legal requirements that apply to a trust in your estate plan. Our website has more on this topic and what to do if you are trying to decide on the creation of a trust.

Many individuals want to avoid the probate process to maintain their family’s privacy. Most everything filed with the court becomes part of the public record. It’s easy for someone to go to their local courthouse and learn a great deal about your assets reading your case file. If the thought of this happening once you’re gone rubs you the wrong way, then you may find it helpful to learn about more discreet ways to pass what you have on to others.

One way that you can avoid the Florida probate process is by changing the way that your property is classified. You may want to modify your home’s deed to reflect that you have joint ownership with tenancy by the entirety or survivorship rights. You can do this with investment or bank accounts as well.

You may also set up a revocable living trust. You can document how you’d like to administer it at different stages. You may highlight how you want to be in full control of it while you’re alive and thriving, but have someone else step in and control it if you become mentally unwell. You may also spell out who will serve as trustee over the trust once you die in your instructions.

A third option for avoiding the Florida probate process is for you to make use of life estate deeds or to carefully make beneficiary designations.

You may want to earmark any funds contained in your bank account for a particular individual through a process known as “payable on death”. You may also want to designate someone to receive the proceeds contained in your life insurance policy or have them gain ownership rights to your investment account. All this can be achieved by listing your designee as a beneficiary in your ownership documents.

There are many pros and cons associated with these different approaches to avoiding the probate process. Speak with a trusts attorney in Miami to learn about the benefits and drawbacks associated with each of these options.

If you are interested in avoiding probate, you should consider implementing several strategies in order to efficiently achieve these goals. This article will focus specifically on the pros and cons of using living trusts as a probate avoidance strategy.

The benefits of living trusts

Perhaps the biggest advantage of the creation of a living trust is that it almost guarantees that the assets help within will now be subject to court oversight or involvement after you pass away. This is because when assets are placed into a living trust, they effectively are not your possessions anymore.

Another great advantage of living trusts is that they make it very easy and simple for beneficiaries access. At the end of your lifetime, your loved ones will be able to gain the inheritance held in the trust very quickly, and they will not have to go through the stressful process of probate in such a difficult time.

The disadvantages of living trusts

However, living trusts are not always the best choice for everyone. To set up, they are typically much more complex when compared to simply writing a will, for example. They are also expensive to fund. However the upfront costs are likely to pay off in the long-run.

If you are interested in setting up a living trust so that you can avoid probate, you should take swift action to understand more about the law.

Married couples can choose to put up to $150,000 in a 529 account without the need to file any tax forms. However, some of that money may be put back into an individual’s estate if the person who made a front loaded contribution dies less than five years after it is made. The same could also be true if the beneficiary of the account passes away.

It is important to note that distributions from a 529 plan that are not used for qualified educational purposes could be subject to a 10% penalty. Those amounts could also be subject to ordinary income tax rates. Therefore, individuals are encouraged to not to put in more money than they believe a child or grandchild might reasonably need.

While trusts can be an effective estate planning tool, they may require that individuals give up control of assets. An attorney may be able to discuss the different types of trust documents that a person might create and how they may help an individual create a quality estate plan. Legal counsel may also discuss the process of decanting an irrevocable trust if that option is available to an individual. That could make it easier to change the terms of such a document.

One of the key benefits of a trust after a person has passed is that assets in the trust can likely bypass probate. This means that there is no need for a judge to give permission for assets to pass to beneficiaries. Unlike a will, a trust is not entered into the public record. Therefore, it is unlikely that a creditor or other outside party will learn about a deceased person’s finances.

Avoiding probate may also result in lower costs for surviving beneficiaries. In many cases, probate attorneys will charge for their services by the hour, which could mean a hefty legal bill for an estate to cover. Since a trust is harder to challenge than a will, the odds are low that anyone will try to challenge it. However, it is important to note that it is possible to successfully do so depending on the facts of a case.

While trusts may offer multiple benefits to an estate plan, it is important to understand how they work before creating one. An attorney may be able to explain what a trust does, if a person needs one and the costs of creating and executing the document. Working with an attorney to create a trust may maximize the chances that the document is created in accordance with a person’s wishes and with state law.

Options such as transfer-on-death accounts or payable-on-death accounts for checking, savings, bonds, certificate of deposits or investment accounts also allow those assets to be passed directly without going through the probate process. However, this option is often presented with overemphasis on the advantages of avoiding probate and too little information about potential drawbacks or investigation into how the estate plan might be affected.

For example, a carefully prepared estate plan may make use of tax savings strategies with trusts. If these accounts have beneficiary designations instead of funding the trust, these strategies could be wasted. There might not be enough assets to fund trusts at all. Trusts can also provide protection against creditors and other threats, which a beneficiary designation cannot provide. If most assets pass via beneficiary designation, there might be insufficient funding in the estate plan to pay for administration costs. Beneficiaries might also be left liable for estate tax.

Beneficiary designations override instructions in a will, so it is important to ensure that they are consistent with estate plans. People who are creating an estate plan with the assistance of an attorney should try to be thorough in discussing all their assets and should understand the ramifications of making changes to the plan. Estate plan do need to be reviewed periodically. As families, assets and laws change, estate planning strategies may need to change as well.

The specific tax effects of a trust may vary depending on the kind of trust that was created as do the options for the trustee in managing the funds. Trusts name a trustee to manage the assets for the benefit of the beneficiary. In some cases, the beneficiary may also be named as the trustee; in other cases, a third party serves this role. The trustee can make different decisions for the money depending on the rights that they have. Some trusts may provide trustees with greater discretion while others provide specific details about how the assets are to be managed.

Some trustees may want to use trust assets in a 529 account or other tax-advantaged account for education. This may be acceptable under the language of some trusts depending on the level of control the trustee is given. Many trusts are created specifically to provide education funds for later beneficiaries. This may also provide greater tax protection than simply taking the money as income.

People who make detailed plans for the future may find that trusts help them achieve their goals. An estate planning attorney may help people draft a trust that offers the level of discretion and tax protection that may best serve their interests.