Your entire life, you work hard in order to develop your savings. Shouldn’t you have a say in where your money goes after your life is over? When the time is right, you should be able to have authority regarding how and where your money and property are allocated upon your passing.
While a will is a useful tool for estate planning, it will not meet all of your needs if you’d prefer certain allotments to be expanded throughout a lengthy period of time. You may need to add a trust to your will in order to fulfill this requirement.
Common Types of Trusts in Florida
This is perhaps the most straightforward of all the trusts offered in Florida. These trusts are payable-on-death (POD) accounts that are set up at a bank by a benefactor for a certain beneficiary. This beneficiary will only receive the funds in the Totten trust once the benefactor passes away. The beneficiary holds no legal or financial rights to the money until the benefactor dies.
This sort of trust is designed for philanthropy in the sense that this money is allocated for charity upon the benefactor’s death. An advantage of using this type of trust is that benefactors may save quite a bit of money on their own taxes through tax discounts. Similarly, Florida doesn’t impose a state estate tax, which serves as a significant tax benefit.
Revocable Living Trust
These written agreements allow trustees to retain and administer the grantor’s assets on the beneficiary’s behalf. These trusts are often used in order to avoid probate court with respect to the grantor’s estate.
This type of trust includes either one or multiple insurance policies. The grantor has the ability to transfer policies that already exist into the trust itself, fund the trust using insertions of money, or purchase policies in the name of the trust. As long as the grantor is not the trustee and doesn’t hold ownership over the trust, this type of trust can avoid estate taxes.
Florida Asset Preservation Irrevocable Trust (FAPIT ™)
The Florida Asset Preservation Irrevocable Trust (FAPIT™) is an irrevocable trust with far more options than were previously available. Presently, the only attorney in Northwest Florida who has the ability to deliver the FAPIT™ difference is Attorney Keith P. Vanover of Vanover Law Firm.
The Benefits of FAPIT™
A FAPIT™ allows you to retain more of your estate by protecting your assets from long-term care costs and future liabilities. Your assets are protected in a FAPIT™ from the following:
- Your children’s creditors
In addition, FAPIT™ solves the following traditional irrevocable trust issues:
- The trustee is forced to establish a new IRS number and file returns separately.
- The creator loses control over the management of the assets and the income.
- Higher tax penalties.
- No future beneficiary adjustments once created.
The following are advantages of the FAPIT™:
- The trustee may be altered at any time for any reason without court permission.
- Beneficiaries may be changed at any time for any reason without court permission.
- Eligible for Medicaid and VA Long Term Care Benefits after 5 years. All FAPIT™ assets are protected from spend-down rules.
- Protects assets from you, your spouse and your children’s future liabilities.
- The trustee may distribute income and principle to anyone except you. All of the income may be reserved for yourself or your spouse. Additionally, your beneficiaries will gain a full step-up in tax basis upon your death. This typically allows beneficiaries to avoid capital gains.
- No new IRS number is required. No separate trust tax return must be filed.
If you have assets and are over 50 years old, you’d be wise to consider a FAPIT™. This trust will make sure that all your assets aren’t lost to long term care. The FAPIT™ will be customized for your particular situation and provides you with the peace of mind knowing that your hard-earned assets won’t vanish due to an unexpected accident or health issue.
The experts at Vanover Law Firm are highly experienced in this area of the law and can help with all your estate planning needs. Don’t hesitate to contact us right away with your case.
Call the Vanover Law Firm experts today at (850) 999-0006 to speak with a Fort Walton Beach attorney about planning your estate.