You may know that a trust is one of many tools you might use to plan for your and your Florida family’s future, but you may not have a comprehensive understanding of how a trust works or why one might benefit you. While a will gives you a chance to say who you want to take ownership of your assets after you die, there are limits to what a will allows you to do.
According to Kiplinger, many people working on their estate plans choose to create trusts when they want to do something more specific than a will allows you to do. While there are many different reasons you might decide to create a trust, many people do so because they want to do the following.
Protect their legacies by controlling spending
A trust allows you to set specific parameters over who inherits your assets and under what conditions. Say you have a child who is a spendthrift, or a child who is battling a substance abuse problem. You may not want to give those beneficiaries a lot of money or property at one time. With a trust, you might decide to have your trustee only make distributions when a beneficiary hits a certain age, certain milestones or what have you.
Protect eligibility for public assistance
Another reason creating a trust may benefit you is because you have beneficiaries who receive means-based public assistance. They have to go through a qualification process to get these benefits. Receiving too much from you in terms of inheritance may cut them off from Supplemental Security Income, Medicaid or other means-tested benefit programs.
You may also create a trust to protect assets from creditors or handle unique assets that are otherwise tough to divide, among other common reasons.
