4 Objectives that You Can Meet by Distributing Assets to Your Family Members Through a Living Trust

When you work with an estate planning lawyer to create a comprehensive estate plan, you likely have specific objectives, some of which a living trust may achieve. For instance, you may want to make handling your affairs as simple as possible for your surviving family member, minimize taxes, and avoid probate. Creating and funding a trust with your assets can help you meet these and other similar objectives. A Florida estate planning lawyer at Kramer Green can help you determine whether a trust achieves your goals and, if so, draft an estate plan that incorporates a trust.

Although people create trusts for various reasons, the following are four common objectives you can meet by distributing your assets to your heirs through a trust.

  1. Creating a trust helps your heirs avoid probate.

If you own assets at the time of your death that are not jointly titled with another person and has no named beneficiary, they are probate assets. As a result, when you pass away, the only way to transfer ownership of those assets is for your heirs to open an estate for you in probate court. A personal representative whom the probate court designates then distributes the probate assets to your heirs according to the terms of your will or, if you pass away without a will, according to the laws of intestate succession.

Probate can be costly, cutting into the inheritance you leave your heirs. Furthermore, probate proceedings can be lengthy and cause a significant delay in transferring ownership of the probate assets to your heirs. Probate can be particularly burdensome if you own property in multiple states, leading to separate probate proceedings in each state.

However, if you create a trust AND transfer ownership of what otherwise would be probate assets to the trust during your lifetime, you alleviate the need for probate. Typically, you pair your trust with a pour-over will, which transfers ownership of any assets to the trust after your death that you may have inadvertently forgotten to transfer to the trust during your lifetime. Following your death, your designated trustee then distributes or holds in trust your assets to or for the benefit of the named beneficiaries according to the terms and conditions of the trust, with no involvement by the probate court.

  1. A trust allows you to maintain better control over the distribution of your assets.

When you leave a life insurance policy with your child as the beneficiary, the child immediately receives the policy’s proceeds upon death. Likewise, if you leave a certain percentage of your estate to your child in your will, your child receives that portion of your estate once the estate is settled and the personal representative makes distributions. However, in the case of a living trust, you can dictate how and when your heirs receive your assets.

For example, you can provide for your successor trustee to immediately distribute the trust assets upon your death after paying any creditors and related expenses. Alternatively, you can draft a trust allowing your successor trustee to make periodic income distributions to your heirs and discretionary principal distributions for specified expenses, such as healthcare, education, or real estate purchase. You also could stipulate that the successor trustee retains the principal in trust for the heirs until they reach a certain age, such as 25 or 30.

  1. A living trust can help you avoid guardianship proceedings.

A living trust agreement usually contains a provision that if the grantor or creator of the trust cannot manage trust property due to incapacity, the successor trustee will assume control of the property for the grantor’s benefit. The living trust document should define what constitutes incapacity and what events trigger the successor trustee to take control of the property. However, the automatic power transfer based on incapacity avoids the often expensive, burdensome, and very public filing process to have the court appoint a guardian to handle your property.

  1. A trust can protect an heir who must maintain government benefits eligibility.

If you have an heir who has special needs or a disability and therefore relies on certain income-based government benefits, receiving even a small inheritance can make that person ineligible for those benefits. Fortunately, you can incorporate a special needs provision into a living trust, which can preserve the inheritance to meet certain supplemental needs for your loved one while maintaining their financial eligibility for benefits such as Supplemental Security Income (SSI) and Medicaid.

Look to Kramer Green for Help with Your Estate Planning Matter

The Florida estate planning attorneys of Kramer, Green, Zuckerman, Greene & Buchsbaum, P.A. are prepared to assist you and your family through every step of creating the estate plan that best meets your and your family’s needs. We know how to most effectively and efficiently draft an estate plan that achieves your goals, including creating a living trust where appropriate.

Our objective is to guide you through the complex legal matters that estate planning can involve. In addition, we want to help you lessen the burden on the surviving loved ones you will leave behind. Contact our office today at (954) 966-2112 or reach out to us online to schedule a time to discuss your legal estate planning issues with our attorneys.

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