I am often asked whether an individual or couple needs a trust.  Most people are not sure what a trust is, but they have heard that a trust may help them “avoid probate.”  Before deciding whether you (individual or couple) need a trust it is helpful to know what a trust is.  Basically, a trust is a legally enforceable agreement between the settlor (person or persons creating the trust), the trustee (the person(s) or entity that has certain duties) and the beneficiaries.  The duties the trustee has to manage the trust property and the duties the trustee has toward the settlor and the beneficiaries are defined in the trust agreement and by state (Florida) law. 

A trust can provide many benefits for the settlor and the beneficiaries.  For example, a trust is not supervised by a court and generally provides more privacy for a settlor because there are no public records where some outside person will be able to determine who the beneficiaries are.  A trust provides for centralized management of assets.  Properly funded, a trust can avoid the probate process and may be a less expensive way to transfer assets.  A trust is an excellent vehicle to plan for various contingencies such as if a primary beneficiary dies or become disabled.   A trust can be used to minimize estate taxes or minimize income taxes among several beneficiaries.  I usually set up one joint trust between a husband and wife so a husband and wife do not have to actually split assets when setting up an estate plan.  Generally the larger the estate, the more likely the settlor(s) will benefit from a trust.

However, a trust is not for everyone.  For example many times individuals with a modest or small estate consisting primarily of their homestead property do not need a trust. When a settlor dies there are still duties for the trustee to perform, and trust administration can be a complicated a probating a large estate.  I know several one attorney in town to tries to convince every individual to set up a complicated dynasty trust no matter what the size of the individual's estate.  If you do not understand that a 50 page trust says or why you need it, then you should never set one up.  Contact attorney Matthew Linde today for more information.
Matthew A. Linde
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