Florida residents have many options to consider when developing future estate plans. Many people choose to utilize trusts for this purpose. CNN Money explains that there are two primary types of trusts. In contrast, a testamentary trust can be outlined as a provision of a will and then become effective upon death. An inter-vivos truss, also referred to as a living trust, takes effect upon creation even while the person is still living.
The Fidelity website notes that in any type of trust, a trustee is appointed to essentially control the assets in the trust. When a person dies with a trust in effect, the probate process is avoided. This can reduce the length of time that it takes for assets to be distributed to heirs. In addition, some taxes may be able to be avoided as well.
There are two types of living trusts. One is a revocable trust and the other is an irrevocable trust. In the former, changes can be made by the person who created the trust at any time. This cannot happen with an irrevocable trust as all changes must be approved by the beneficiary. However, it is the irrevocable trust that removes all trust assets from the taxable portion of a person’s estate, thereby reducing the tax debt upon death.
Trusts not only bypass probate litigation and some taxes but can also allow people to have better control over their money even after death. It can offer ways of managing money for beneficiaries that are known to be poor money managers.