When it comes to estate planning, writing a will isn’t always enough. It would be best if you established a revocable living trust (and in some cases, an irrevocable trust) to have greater control over your assets and avoid unnecessary taxes.
A comprehensive estate plan makes provisions for every possibility. An experienced Miami trust lawyer can help you to create the best plan for you and your loved ones.
Will vs. Trust: What’s the Difference?
A will is a relatively straightforward legal document that sets out your final wishes. Besides indicating how your assets will be distributed, you may also use a will to name guardians for your children and specify your funeral preferences.
A trust is more comprehensive and usually the best way to avoid probate. When you create a trust and transfer assets in to it, the trust becomes the owner of the assets. You can appoint someone to manage the trust for a beneficiary’s benefit once you are no longer alive, and then set parameters for how the assets should be distributed.
Trusts can be set up for various reasons. In an estate planning context, they are used to control the transfer of assets to beneficiaries, reduce taxes, and avoid probate. Probate is often a lengthy, frustrating, and expensive process. At a time when your loved ones are grieving, they’ll be grateful that you took steps to reduce the time, money, and energy it will take to settle your estate.
Avoid the Probate Process by Hiring a Miami Trust Lawyer
Although wills and trusts serve the same purpose of transferring property to your chosen beneficiaries, they operate in very different ways. Trusts also offer many advantages that are not provided by a will.
One of the main advantages of a trust is that it allows your loved ones to avoid probate proceedings. Probate is often a lengthy and expensive process. It’s not uncommon for assets to be tied up in court for several years. Unlike the contents of a will, a trust cannot be challenged by third parties, so you can be sure it will reach your intended beneficiary.
Here are a few reasons for a lengthy probate process:
- State-mandated waiting periods to give creditors and disputers time to make a claim.
- Disputes between beneficiaries
- An executor who is slow to act
- Errors in legal documents
- Backlog of court cases
- Lawsuits from creditors
- Assets that are difficult to sell or divide
Delays aren’t the only disadvantage of the probate process. Lack of privacy is also a significant concern. Once your will has been filed with the probate court, it becomes a part of the public record. Any member of the public can access the case file by visiting the local probate court. In areas where probate records have been digitized, accessing these documents online is possible.
There are many reasons to doubt that a beneficiary will be responsible with their inheritance. By limiting their access to the funds and protecting assets from creditors, you can ensure that the beneficiary will use the funds the way you intended. A spendthrift trust works by setting the inheritance aside, then gradually transferring it to the beneficiary. You may also specify that the funds be used for a specific purpose.
Here are a few scenarios that you can avoid by establishing a spendthrift trust:
- Your beneficiary racks up a lot of credit card debt. The bank sues them, and the inheritance is used to settle the debt and recover the bank’s legal expenses.
- Your beneficiary invests their inheritance in a risky investment scheme that goes belly-up.
- Your beneficiary is a young adult with poor money management skills. They spend the money on a new car, vacations, and online shopping.
Because the trust and not the beneficiary owns the assets, they are safe from banks, lawsuits, and creditors.
Special Needs Trust
For parents of children with special needs, the top priority is preserving the child’s quality of life. However, leaving an inheritance can disqualify them from government benefits like Supplemental Security Income (SSI) and Medicaid. Because these programs are needs-based, exceeding a specified net worth can cause your child to become ineligible. With a special needs trust, the assets belong to the trust rather than the beneficiary. This preserves your child’s eligibility for government benefits.
Consult an Experienced Miami Trust Lawyer
We develop lifelong relationships with our clients and their loved ones at the Martins Law Firm. Regardless of your estate planning needs, we are dedicated to creating a plan that safeguards your legacy.
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