by Estate Planning Attorney Nydia Menendez
You have probably heard some common myths about Trusts: “A Trust is only for wealthy people,” or “I don’t have a great deal of assets, so why do I need a Trust?” Others may think “I already have a Will, isn’t that enough?” or “A Trust is too expensive.”
But, if this was a True or False quiz, the response to each of those myths would be a big, fat FALSE!
What is a Trust?
Here we will be talking about a Revocable Living Trust, which is the basic Trust most frequently used in Estate Planning.
A Trust is a legal agreement where you as the Grantor, the creator of the Trust, transfer your assets to the Trust, and give specific instructions to the Trustee – the person who manages the assets in the Trust – as to how to manage the assets for the benefit of the Beneficiary.
While you are alive and have capacity, you are all three of these parties. You are the Grantor; you are the Trustee; and you are the only Beneficiary. This means you are not releasing any control or benefit of the assets in the Trust. Essentially, nothing really changes.
Why have a Trust?
A Trust acts as a stand-by device – a “just in case” tool, so that you can have a plan, always be in control, and protect what really matters.
For example, if something were to happen to you, because you have appointed a Successor Trustee for the Trust, there will immediately be someone, chosen by you, to manage your assets. Since the assets have been transferred to the Trust and there is a Successor Trustee, there is immediate management of the assets without court involvement!
Should you become incapacitated during your lifetime, the Successor Trustee would manage the assets in your Trust for your benefit. Without a Trust, you would need to go to court for a Guardianship, and the court would supervise the management of your assets. As you can see, it is much better to have a Trust in place with a Successor Trustee, especially because statistics tell us that 70% of persons age 65 and older will experience some form of incapacity in their lifetimes.
A Trust is also very useful when the Grantor passes away. With the assets already in a Trust, and a Successor Trustee appointed, there is no need to go through the Probate process to transfer assets to beneficiaries. What’s more, distributions to the beneficiaries could also be in a Trust, instead of outright, which can be beneficial in many cases.
Preserving Your Wealth
If your beneficiaries are minors, have creditor issues, are contemplating divorce, or receive government benefits, outright distributions to them are likely not desirable. These distributions will be best preserved if they are done into a Trust with specific terms matching the unique needs and circumstance of your beneficiaries.
You are in Control
A Trust has a built-in succession plan, which includes a Successor Trustee, who essentially substitutes for you. Your estate would not need to go through the judicial process of Guardianship or Probate, and you can control distributions to protect the beneficiaries when your assets are placed in a Trust.
If your goal is to put your affairs in order, a Trust should be a key part of your Estate Plan.
Where to Get Started?
If you want to learn more about how to plan for your future to make sure you leave a legacy for your loved ones, we invite you to call our office at (954) 963-7220 to speak with a member of the Menéndez Law Firm who can help you navigate the process of creating a unique Estate Plan to meet your family’s needs. You may also want to watch the video series on our YouTube channel or join us for the next live Wills, Trusts and Estate Planning webinar on Zoom by registering at no charge on our website www.menendezlawfirm.com
Estate Planning Attorney
Menéndez Law Firm
2699 Stirling Road, Suite B200
Fort Lauderdale, FL 33312
Tel.: (954) 963-7220
Fax: (954) 963-7232