Learning the Basics on Trusts
When it comes time to begin making arrangements for your estate, you might find that there is a great deal of information to go through and understand. With so many types of estate planning tools available, each with its own relative benefits, you may be wondering what the best option is for you. Increasingly, Americans are turning to living trusts as a way of managing and distributing their assets either in place of or as a supplement to a traditional will.
A trust is a legal agreement that allows a person to hold property for the benefit of future beneficiaries. Although there are many types of trusts, the most popular among estate planners is a living trust, which property owners create while they are still alive. Individuals may place their assets in a living trust for months or even years, and it will simply function as though they still own the property. Then, when they die, the assets and property in the trust get passed to the beneficiaries.
One of the main reasons why people leverage living trusts is because they offer the benefit of avoiding probate, a legal process in which estates are settled following someone’s death. The process can be long and sometimes costly, and many families use trusts to skip that process.
There are many different types of trusts, even among the living trust variety. For example, there are trusts known as AB trusts, which are used to reduce taxes. There are also special needs trusts for beneficiaries who receive government benefits such as Medicaid. Besides special provisions, each type of trust may be written to include provisions regarding whether it is revocable and how it can be modified.
Trusts can be highly effective estate tools, but they are complex and sometimes difficult to truly understand. To learn more about establishing a living trust in Florida, speak with a knowledgeable attorney at BaumannKangas Estate Law.