What is a Trust?
A trust is an important estate planning tool. A trust is a fiduciary agreement involving three parties: the creator of the trust (“settlor” or “grantor”), the trustee (and successor trustees), and the beneficiaries of the trust. The trust agreement is allows for the trustee, or an independent third party, to hold assets for the benefit of a beneficiary or beneficiaries. The settlor/grantor can establish a trust during his or her lifetime (“intervivos” or “lifetime” trust) or by Will (“testamentary” trust). The settlor/grantor transfers the property into the trust, and the trustee is the individual responsible for administering the trust property for the beneficiaries.

Overall Benefits of Trusts
A trust can be drafted in many ways in order to protect your assets and determine when and how your beneficiaries will inherit from your trust. One of the greatest benefits of a trust is that it can avoid probate – this will allow for your designated beneficiaries to access your assets immediately upon your death and without the need for Court intervention. With a trust, you can control your wealth and the manner of distributions of your wealth after death. Our trust attorneys can create a revocable trust agreement for you that allows your access during your lifetime and dictates the manner in which the property will be distributed following your death.

Trusts also provide for additional privacy for the trust creator and the beneficiaries of a trust – the terms of a trust do not need to be recorded in the public records and the trust instrument does not need to be filed with a governmental agency such as the probate court when an estate is opened.

Trust Forms

Revocable Trust Agreement

The most common form of trusts for estate planning purposes is the revocable trust agreement, also known as an “intervivos” or “lifetime” trust. This trust is also known as a “living trust,” which an individual creates during their lifetime and is revocable, meaning, the trust can be amended or revoked at any time during their lifetime. Having a revocable trust agreement in place before your death may avoid the need to open an estate after death, allows your beneficiaries quicker access to assets after death and ultimately provides additional privacy to your family and designated beneficiaries. During your lifetime, the income generated by the trust will flow through the settlor/grantor. This trust form is very flexible and can be dissolved at any time by the settlor/grantor, depending if your intentions or circumstances change over time.

Generally, the settlor/grantor will fund and contribute to the trust during his/her lifetime. Most often, the grantor also serves as the trustee during his/her lifetime and therefore has complete access over the management of the trust assets. Upon the settlor/grantor’s death, the trust becomes irrevocable – the successor trustee appointed by the trust will assume the role as trustee but neither the successor trustee nor the beneficiaries can alter the trust provisions. The trustee then has a fiduciary duty to the settlor/grantor and trust beneficiaries to faithfully administer the trust according to its terms and follow the settlor/grantor’s intentions.

Testamentary Trust
A testamentary trust is created by your Last Will and Testament – therefore, the trust only becomes funded and active following your death. It is outlined by your Will, and includes instructions as to who will serve as trustee, and the distribution scheme to your beneficiaries. It is common to designate testamentary trusts in your Will for those beneficiaries who are minors in order to avoid the need to open a guardianship in Florida.

Irrevocable Trust
An irrevocable trust agreement transfers your assets out of your name (as the settlor/grantor) and out of your future estate to avoid probate and estate taxes; however, an irrevocable trust agreement is irrevocable – once you create the trust and fund it with your assts, the trust cannot be further altered, modified or amended by the settlor/grantor and the settlor/grantor loses control over the assets. Creating an irrevocable trust is preferred by individuals seeking to avoid the amount of estate taxes subject to your future estate and provides additional creditor protections from potential legal judgments against you during your lifetime.

Which trust is right for you?
Developing a trust agreement involves complicated legal terms and documentation that must be properly executed according to Florida law. The trust attorneys at Yelen Yelen & Simon, P.A. are experienced in the realm of trust agreements and can assist you in determining which trust form is right for you. Contact our estate planning attorneys to learn how a trust agreement can meet your needs and protect your future estate.