What is a Trust? 

A trust is a legal arrangement where one party, known as the trustor, transfers assets (such as property, investments, or cash) to another party, known as the trustee. The trustee holds and manages these assets on behalf of a third party, known as the beneficiary, according to the terms outlined in the trust document.

What Are Trusts Used For?

Trusts are versatile legal instruments that can be used for many purposes. Some of them include:

1. Estate Planning: Trusts are commonly used to simplify the transfer of assets to beneficiaries upon your death; this can bypass the probate process and possibly reduce estate taxes.
2. Asset Protection: Trusts can shield your assets from creditors or lawsuits, providing a layer of protection for the trustor’s wealth.
3. Special Needs Planning: Special needs trusts ensure that individuals with disabilities continue to receive financial support without jeopardizing their eligibility for government benefits.
4. Privacy: Trusts can offer privacy by keeping asset transfers out of public record, unlike wills which are typically subject to probate.
5. Managing Wealth: Trusts can be used to manage and distribute wealth over time, ensuring beneficiaries receive financial support in a structured manner.
6. Caring for Minors: Trusts can be established to manage assets for minors until they reach a specified age or milestone, ensuring their financial well-being.
7. Tax Planning: Trusts can be used to minimize taxes on assets, income, and estates through strategic planning.

Consulting with legal and financial professionals is essential when considering the creation and/or management of a trust. Depending on your individual circumstances and goals, Central Florida Wills & Trusts attorney John A. Russo will work with you to create a trust that best meets your specific needs and objectives.  

What Types of Trusts are There?

While there are many different types of trusts, here are some that may help you meet your specific needs and objectives:

A living trust, also known as a revocable living trust, is a legal arrangement created during the trustor’s lifetime to hold and manage assets. In a living trust, the trustor (the person creating the trust) transfers ownership of assets to the trust, appoints a trustee to manage those assets, and designates beneficiaries to receive the assets according to the terms of the trust. The trustor retains the right to modify, amend, or revoke the trust during their lifetime, as circumstances change.

An irrevocable trust is a type of legal arrangement where the trustor transfers assets to a trustee for the benefit of one or more beneficiaries. Unlike a revocable trust, which can be modified or revoked by the trustor during their lifetime, an irrevocable trust cannot be altered or revoked once it is established, except under very limited circumstances and with the agreement of all parties involved. Irrevocable trusts can be valuable tools for individuals seeking asset protection, estate tax planning, and charitable giving opportunities. Given the permanence and complexity of irrevocable trusts, however, they are not suitable for everyone. It’s essential to consult with a Brevard County Wills & Trusts attorney to determine if an irrevocable trust is right for you. 

A support trust for children, also known as a discretionary trust, is a type of trust established for the benefit of minor children or young adults. It can help provide financial support and security for minor children or young adults. A support trust can be a valuable tool for estate planning, allowing the trustor to designate how their assets will be managed and distributed for the benefit of their children. By establishing a support trust, the trustor can ensure that their children are provided for financially, even if they are no longer around to oversee their financial affairs. Support trusts can be used to fund education expenses, provide for healthcare needs, or assist with housing costs. The trustee can adjust distributions based on the beneficiaries’ changing needs and circumstances. It’s important to carefully consider the terms of the trust document when establishing a support trust for children, including the choice of trustee, the guidelines for distributions, and any conditions or restrictions on the use of trust funds.

Choosing to set up a trust and the specific benefits of that trust will depend on your individual circumstances, goals, and preferences. Regardless of which trust you need, it’s essential to consult with legal and financial professionals to determine whether a trust is the right estate planning tool for you. John A. Russo, a Central Florida Wills & Trusts Attorney can guide you through the process, and help you make the best decision for you and your family.