Are there assets I should consider funding into my Florida trust agreement? The decision to fund specific assets into your Florida trust agreement should be made wisely, taking into account the intricacies of your financial situation, family dynamics, and long-term objectives. An experienced Florida estate planning attorney, who is well-versed in the nuances of trust agreements and the broader landscape of Florida estate planning, can offer invaluable guidance.
Trust agreements are an integral component of strategic Florida estate planning. They serve as a tool for managing assets during one’s life and efficiently passing them on after death. While Florida trusts provide numerous benefits, the decision of which assets to fund into a trust may not be clear. We want to discuss placing assets into your Florida trust agreement and why seeking guidance from an experienced Florida estate planning attorney is critical.
To begin, in regard to married couples that are in stable, long-standing marriages it is often advised that they own assets jointly as tenants by the entirety (TBE) while both are alive. If either spouse is sued individually and not jointly, then assets owned as TBE are not at risk and receive protection. In addition, the TBE approach ensures seamless transition of ownership to the surviving spouse upon the first spouse’s death. In many situations, only then is it advisable to fund the survivor’s trust. This strategy aims to maximize the asset protection benefits inherent to TBE, which might be lost if assets are shifted to a joint trust or separate trusts prematurely.
There are many good reasons for funding assets into your Florida trust agreement, such as:
- Avoiding probate. One of the most significant advantages of trust-funded assets is bypassing the often tedious and expensive probate process, ensuring a smoother transition of assets to beneficiaries. Note, though, that there are other ways of avoiding probate at the death of the first spouse to die, such as owning assets with your spouse as TBE.
- Ensuring your privacy. Florida trust agreements are private documents, unlike Florida last will and testaments, which become public record once they are filed in accordance with the law following death. Funding assets into your Florida trust can help ensure the details of your assets remain confidential.
- Continuous asset management during incapacity. Should you become incapacitated, a properly structured Florida trust allows for the efficient management of your assets without court intervention. Your successor trustee can step in and follow your wishes for what you want through your trust.
- Flexibility. Florida trusts can be tailored to specific needs, ensuring assets are distributed according to your wishes, be it stipulating age-based distributions to heirs or setting aside funds for specific purposes.
- Estate tax planning. Florida trust agreements can be structured so as to minimize the impact of federal estate taxes upon the legacy that you leave your loved ones.
There may also be reasons for not funding assets into your Florida trust agreement, such as:
- Complexity. Funding and managing Florida trusts require meticulous attention to detail. Mistakes can undermine the trust’s objectives or even render it ineffective and thus may require court intervention.
- Increased annual costs. Establishing and maintaining a Florida trust can be more expensive upfront than a simple Florida will, although the long-term benefits often outweigh these costs.
- Inappropriate asset issues. Certain assets, such as automobiles, boats, or RVs, are not typically recommended for trust funding. Their titles can be conveniently changed post-mortem without delving into probate. More importantly, placing these assets in trusts may present insurability challenges.
- Loss of certain protections. As mentioned, while TBE offers asset protection, transitioning assets into a joint or separate trust prematurely may strip away these protections.
Be aware that there are a lot of online resources and DIY solutions available, however, creating and managing a Florida trust is a complex affair, best left to your experienced Florida estate planning attorney. Your legacy and the financial well-being of your heirs should not be left to chance or generic advice. Be skeptical of DIY planning options when you want to protect yourself, your family, and your legacy.
We began this blog with the question: Are there assets I should consider funding into my Florida trust agreement? And again, the decision to fund specific assets into your Florida trust agreement should be made very carefully, taking into account the intricacies of your financial situation, family dynamics, and long-term objectives and with the advice of your experienced Florida estate planning attorney.
We know this article may raise more questions than it answers. At 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.