Do All Trusts Provide Protection From Creditors? NO, but Irrevocable Trusts may…
What is the difference between a revocable and irrevocable trust?
• A revocable trust (or living trust) is a trust that allows you to control and manage the assets in your trust while you are alive. You can still buy, sell, or gift your asset while they are in your trust. This type of trust will allow you to avoid probate and may be able to limit your family’s estate tax burden. For more on revocable trusts, please visit https://wfplaw.com/revocable-trusts.
• An irrevocable trust is a vehicle that will still allow you to avoid probate but it also offers immediate asset protection and estate tax reduction. However, with an irrevocable trust, you must often give up all control of the assets you place into the trust and rely on your named trustee to manage them for you.
What are the main advantages of having an irrevocable trust?
• Asset Protection. Assets placed into an irrevocable trust are not considered to be owned by the grantor. Therefore, if you place an asset into an irrevocable trust, it will be instantly protected from creditors and judgment liens and may be protected from bankruptcy trustees and divorce as well.
• Avoiding Probate. Trusts allow your family to avoid probate. Probate is an arduous process that is costly and time consuming. It could delay the distribution of your assets for years. Additionally, probate can cost up to 10% of the value of your estate.
• Tax Advantages. The assets of the trust are not counted as part of your estate, so the estate taxes are lower or even completely eliminated. In addition, many irrevocable trusts also reduce your annual income tax burden.
• Lower Court and Attorney Fees: Distribution through a trust can save you on the attorney and executor’s fees charged to probate a will.
• Asset Protection for Beneficiaries. An irrevocable trust can protect your beneficiaries from having their inheritance taken from them through litigation, bankruptcy, creditors or divorce.
• Privacy. Irrevocable trusts are private documents and not subject to public record. Your family secrets and private bequests are not subject to public scrutiny or the eyes of undesirable claimants.
Will an irrevocable trust benefit me while I am alive? Yes!
• Creditors cannot reach an irrevocable trust. Your assets will be protected from lawsuits originating from business, divorce, or accidents.
• You can pre-select the trustee of your estate to ensure your assets are utilized and distributed as you desire.
How will an irrevocable trust benefit my family?
THERE ARE NO SURPRISES!!!
• An irrevocable trust cannot be changed, so your family can be assured that your original wishes are complied with after your death.
THERE IS NO WAITING
• You family will not have to wait for the assets to be disbursed.
SECURITY AND PEACE OF MIND
• Creating an irrevocable trust will give your family peace of mind that your assets will remain secure and be disbursed properly in a timely manner.
It is important to remember that a trust will be more beneficial to you and your family if it is executed before you need it. Although some people establish trusts after they inherit money, the benefit of privacy will be lost if you wait. A Florida estate planning attorney can advise you on the type of trust that will most benefit you and your situation. This will give you and your family financial security and peace of mind.
For more information on successful Florida estate planning and asset protection techniques, please contact the South Florida law firm of Wild Felice & Partners, P.A. at 954-944-2855 to schedule your free consultation. It’s a Wild world. Are you protected?