Different Kinds of Trusts and Their Uses

 By Pauline Go

A trust is a legal arrangement where one person, known as a trustee, holds the legal title to property on behalf on another person, who is known as a beneficiary. It is not necessary that a trustee has to be a person; even a bank or law firm can be a trustee. Usually the beneficiaries are children who benefit when their parents pass away.
A trust is extremely useful in avoiding probate. Ones the donor passes away, any property included in the trust before the donor's demise becomes part of the trust and immediately passes on to the beneficiaries without the need for probate. This allows the beneficiaries to save time and money. Some trusts also act as tax havens for the beneficiary and the donor. These trusts are often called credit shelters or life insurance trusts. Trusts can also be used to protect property from creditors or aid a donor to qualify for Medicaid.
There are basically two categories of trusts and they are testamentary and inter vivos. A testamentary trust is created by will and it only comes into existence after the donor's death. On the other hand, an inter vivos trust starts during the lifetime of the donor.
There are two types of inter vivos trusts and they are revocable and irrevocable. Revocable trusts are also known as living trusts. In this type of trust, the donor has complete control over the trust and he can amend or terminate the trust whenever he wants. Revocable trusts are usually used for asset management, avoiding probate, and for tax planning.
Irrevocable trust, as the name suggests, is one which cannot be changed or amended by the donor. Any property or assets placed in the trust will not be distributed by the trustee based on the trust document. This type of trust is mostly used when people are doing Medicaid planning.
Then there is another type of trust known as supplemental needs trust, which allows the donor to take care of a disabled child, spouse, relative or friend. The beneficiary can get the assets from the trust for purposes other than those provided by public benefit programs. This way the beneficiary does not lose his eligibility for public benefits like Supplemental Security Income, Medicaid or low-income housing. This can be created as a part of the will.

Pauline Go is an online leading expert in the legal industry. She also offers top quality articles like :
Elderly Asset Protection & Guide To Wills

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Six Tips On A Florida Living Trust - Sunshine Estate Planning

 By Robin J. Derry

Keeping your assets and inheritance matters private, avoiding the costs and frustration of Florida probate, completing a swift legal asset transfer to legal heirs is why Florida living trusts have snowballed in popularity with the "snow-bird" set.
Tip #1 Florida Estate Planning To Avoid Probate Costs. Florida living trusts are all about taking smart and legal planning steps to minimize complexity, cost and grief following death. Remarkably, thousands of people fail to prepare their estate for legal transfer. Age, ill health or an accident leaves them incapable, incompetent or worse! Result? Their entire estate, along with the unraveling of taxes, creditor obligations and more "defers" to the probate court.
* What Probate Costs Families! Families and estates without properly constructed asset transfer documents like the revocable Florida living trust, could lose over 20% of the estate's value to court administrative and attorney fees, and up to three years or more in court time, add-in a chunk of grief and frustration, and then ice the cake with the time-value cost of financial assets taken out of the market for the probate period. And, don't forget your family's total loss of privacy...while a Florida living trust renders the asset details and transfer utterly private, the Florida probate court is an "open book" for any snoopy neighbor or investigative reporter to pour over.
Tip #2 What About Taxes And Asset Protection In My Florida Living Trust. * No Tax Benefit. Florida living trusts do not provide any tax benefits at all. Ordinary earned income and/or capital gains and losses, partnership income, rents and the like for all the assets "funded" into the Florida living trust are treated for taxation purposes on your personal or joint tax filing. The only exception may be Florida living trusts where the combined estate asset "community property" of a husband and wife exceed the then current Federal estate tax exemption figure.
* No Asset Protection. Florida living trusts also do nothing about asset protection from creditors or judgment lawsuits. If you personally own an asset, and if that asset is not protected or legally sheltered, and if you "lose in court", then the litigating party or plaintiff will likely obtain a judgment order to reach-in to your living trust and legally remove the target asset.
Tip #3 Picking Your Trustee And Successor Trustee. If you want to personally direct your Florida living trust business, then as grantor or settler you can appoint yourself as the initial Trustee. Make sure to instruct for a "successor Trustee" who is the person ... or institution like a bank or law firm ... who will have the actual job of distributing the assets according to your instructions, and complying with all filing and statutory requirements under Florida State law.
Tip #4 You've Got To Hire An Attorney - It's The Law. Reviewing assets, preparing a revocable Florida living trust for inheritance matters, and entering into a legal service contract requires that the preparer be a Florida State bar certified attorney. Any other situation constitutes illegal practice of law within Florida, and is punishable. Your Florida estate attorney has a multi-part role ...he or she will identify all your assets, make sure that they legally transfer into your inter vivos revocable Florida living trust.
Tip #5 Getting Your Assets Together. What empowers your Florida living trust is both its form, its administration and whether it has been legally "funded". In layman terms this means that all of your assets ... both in Florida or any other State ... must be legally transferred in title and control to your Florida living trust. Assets that you forgot about or didn't manage to transfer prior to your death could get bound up in probate, and will impact your heirs in ways they don't need to experience. Walk carefully when handling 401K or IRA retirement accounts, in order to ensure that changes to beneficiary designations are handled correctly.
Tip #6 Your Florida Living Trust Is Your Estate Planning "Alter Ego". Think of your living trust as a documentary form of You ... what you've worked for your entire life, the assets you've created, and your preferences for inheritance are entirely captured by your Florida living trust. You "fund" the trust with your financial and real property assets. You can amend it or determine the trust's day-to-day business ... it's revocable ... up until the time of your death. Thereafter, no change is permitted. Your Florida living trust reverts to an "irrevocable trust", managed by your successor trustee under strict rules until all assets have been legally transferred, taxes paid, and creditors paid.
Bottom Line. If you're looking for privacy, and potentially significant cost and time savings to your heirs, without the imposition of court-ordered probate, then examine further the increasingly popular Florida living trust.

Please go to:-
Living Trust: http://www.wise4living.com/lwill/living-trust.html
Spendthrift Trusts: http://www.wise4living.com/lwill/spendthrift.html
Author Robin Derry is publisher for http://www.wise4living.com/ a specialty knowledge site that gives insights and solutions on a wide range of product, technology and lifestyle interests for web-enabled people.

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Living Trust Confusion

 By Maurice Johnson

Confused about living trusts? If so, you are not alone.
A living trust is a legal entity normally created to hold assets in your lifetime and distribute them after your death. [This has nothing to do with a living will. A living will is a document that states your desires regarding use of artificial means or heroic measures if you become disabled.]
The internet is littered with so-called "experts" loudly proclaiming their opinions about living trusts.
Some "experts" say they are the best thing since sliced bread. Others, say they are worthless and their benefits a hoax.
The truth is much more complicated.
Living trusts can do great things for some people and nothing for others. It just depends on your situation.
It is true that such a trust can, among other things, be used to avoid probate and save estate taxes. It also can help provide privacy, flexibility and even avoid a guardianship proceeding if you become incapacitated.
One of the biggest benefits of this type of trust is that it allows you to begin to put your estate plan into action while still alive. You can then get some insight into how your estate plan will work and make adjustments if necessary.
However, there are other ways to achieve these objectives that might be easier and cheaper for you. Also, it can be difficult and sometimes costly to properly prepare and fund a living trust.
So, the truth is that a these types of trusts offers advantages and disadvantages.
Generally speaking, the larger and more complex your estate, the more an inter vivos trust will likely benefit you. Certainly if you have assets over $1,000,000 you should seriously consider having a living trust drafted as part of your estate plan.
The bottom line is to figure out if you should get a living trust you need to either talk to an experienced estate planning attorney about your particular situation or you need to invest some time learning about the advantages and disadvantages of living trusts.

Maurice Johnson is an attorney and has practiced estate planning law throughout his professional career. He is publisher of Free Living Trust Information and Estate Planning Hub Visit those sites to find out more about the advantages and disadvantages of living trusts.

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