Are you aware that one of the estate planning tools created for the management of assets, both during your life and after your death, are trusts? There is not just one type of trust, but several used in estate planning. In our blog we will divide trusts into two categories in order to make them easier to understand. Therefore, simply put, trusts are either revocable or irrevocable. This means they can either be changed or canceled after they are created or they cannot. Be mindful that there may be important legal implications in choosing between revocable or irrevocable.

A revocable trust:
• created by a trustor
• trustor remains as the beneficiary until death
• upon death of trustor passes on to the successor trustee and beneficiaries
• married couples often create and are both co-trustees and co-beneficiaries until death
• upon death of married couple, adult child becomes successor trustee
• other children and even grandchildren, become successor beneficiaries
• NO tax benefits because this trust can be revoked or changed before original
trustor’s death
• often created to distribute assets to beneficiaries to avoid probate

An irrevocable trust:
• once created it cannot be changed, except under limited circumstances
• when the assets are put into the trust, they are no longer considered the property of the trustor, instead, they are the property of the trust
• limits or eliminates both income and estate tax and usually cannot be reached by trustor’s creditors
• often used as a long-term planning tool
• because the assets are not owned by the trustor, they ARE NOT considered when determining whether the trustor is eligible for government programs, such as Medicaid
• often used as a special needs trust for an adult disabled child
• when the parents of a disabled adult child pass away the special needs trust, which is irrevocable, will enable the disabled child to remain eligible for government programs

Now that you have an understanding of the fundamentals of trusts, it is a great time to meet with a Florida estate planning attorney to discuss how best to meet your estate planning goals. At the Perlin Estate Planning & Probate our credentials enable us to provide a multi-disciplinary approach to our legal services. By building relationships with our clients, we are also able to understand each client’s needs and desires, and we support such goals through thoughtful, comprehensive planning techniques. We encourage you to contact us and schedule a meeting.