FLORIDA – October 4, 2020

When an individual has assets that they want to make certain are utilized in a particular fashion, during their lifetime and/or upon their death they can set up a trust in their estate planning. An experienced estate planning attorney can set up trusts to act as a financial tool to make certain a person’s assets are held, managed, and distributed properly in accordance with their intended mission.

Setting up a trust.

  1. Items such as stocks and bonds, real estate, mutual funds, or personal property are usually included in a trust. Legal documents are prepared and filed with the appropriate agencies and courthouses to transfer and record deeds, or re-register stocks under the name of the trustee. A brokerage account will need to be set up so that assets can be bought and sold per the terms of the trust agreement.
  2. A grantor will be named as the person who will be moving assets into the trust.
  3. Beneficiaries of a trust are the people, or entities directly benefitting from the trust.
  4. Designated persons, or financial entities will manage the assets, determining if they should be invested and advising on the schedule of distributions.
  5. A trust will have a life span and termination provisions will be outlined.
  6. A trust will be considered revocable (have the ability to be changed) or irrevocable (not able to be changed)?
  • Revocable trusts have assets held in the name of the trust and can be managed by a successor trustee if the grantor becomes mentally incapacitated. Assets are still subject to the same legal provisions as personal property, meaning they can be taxed or attached by others, such as creditors, when necessary.
  • Irrevocable trusts are commonly used to remove the value of property from a person’s estate so that property cannot be taxed when the person dies. The individual who transfers assets into an irrevocable trust permanently gives those assets to the trustee and to the beneficiaries of the trust.
  • A trust fund usually requires a taxpayer identification number (TIN) from the Internal Revenue Service so that tax returns and financial accounts at banks and brokerage firms can have a unique identifier directly correlating to the day-to-day financial business of the trust.

Administering a trust.

Seek legal counsel to make sure a trust will be set up and administered according to the specific requests of the person initiating a trust, in concert with the laws of the state in which it is filed.  Accounting records must be kept in support of all business activities related to the trust.  Management firms often take over specific functions of a trust and outsource to lawyers, professional accounting, and investment firms in the best interests of the operation of the trust.  Contact an experienced attorney at The Estate, Trust & Elder Law Firm, P.L. in Vero Beach Florida to answer your questions regarding trust documents.

 

The Estate, Trust & Elder Law Firm, P.L.

IRC Chamber of Commerce

1216 21st Street
Vero Beach, FL 32960
Phone: 772-410-5156

Sources.

https://www.flsenate.gov/Laws/Statutes/2018/Chapter736

 

 

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