Estate Planning And Elder Law Services In Orlando And Beyond

Preparing For A More Certain Future Using Trusts

At The Kaplan Firm, we customize our estate planning representation with a focus on your best interests now and going forward. We understand that using trusts in an estate plan to help ensure future financial stability for loved ones can also help stave off financial problems in the present. When it comes to selecting the best type of trust, there are a couple of things to consider before making a choice.

Choosing The Best Option For You And Your Loved Ones

Two broad categories of trusts exist – revocable and irrevocable. Revocable trusts are those that are more flexible. Things are not set in stone and can be altered as needed when there are changes in your family, your assets, or your lifestyle. Irrevocable trusts are not subject to change and are typically used by those seeking estate tax benefits and more protection from liabilities.

Regardless of your choice, the objective of a trust is to customize how assets are dealt with currently and over time.

The primary benefits of both trust types include the following:

  • Avoiding the lengthy probate process
  • Tax issues
  • Creditor protection
  • Financial support for family
  • Charitable donations

Revocable trusts, aka living trusts, can distribute assets to beneficiaries following your death. Another option involves creating additional irrevocable trusts for loved ones or specific organizations.

An irrevocable trust can provide greater protection from creditors and estate taxes. It can also evolve into a testamentary trust with specific options that include the following:

  • Transfer wealth to a younger generation
  • Ensure family businesses stay with loved ones
  • Donate to charities

Irrevocable life insurance trusts (ILITs) can designate funds for estate taxes, which is especially beneficial to keeping a family business for loved ones. The trustee plays a pivotal role, serving as the de facto owner of the policy and collecting all proceeds that are often distributed to the beneficiaries.

Additional types of irrevocable trusts include the following:

  • Grantor-retained annuity trusts
  • Qualified personal residence trusts
  • Charitable remainder annuity trusts
  • Special needs trusts
  • Domestic asset protection trust
  • Generation-skipping trusts

Taking Control Of Your Legacy

Many options exist to make life easier for loved ones following your death. With the establishment of trusts, multiple generations can have a more secure future without the burden of onerous taxes and other expenses that come with inheriting funds. Below is a short video to help understand the revocable trusts and how they help avoid probate:

Special Needs Trusts In Florida

Special needs trusts are unique trusts which are used to care for people who are unable to care for themselves or who lack legal capacity, such as those with certain disabilities as well as children who need specialized care. They allow for a legal guardian to act as the trustee for assets set aside for a person with unique needs that can be used to supplement existing government benefits. Most importantly for those which are set up to care for elderly or disabled family members, these trust assets do not interfere with the beneficiary’s ability to obtain Medicaid or Supplemental Security Income through Social Security.

Some of the most important benefits of special needs trusts are that they provide protection for your loved ones even if you are no longer able to care for them. They are an invaluable tool for your estate plan, as a special needs trust can be included in your will as a testamentary trust. This would ensure that your beneficiaries are provided the care they need and that the assets you set aside for them are in trusted hands with your chosen trustee.

There are different categories of special needs trusts that you can potentially use, depending on your unique needs and situation. The first is a Third-Party special needs trust and the other is a First-Party special needs trust.

Third-Party Special Needs Trusts

A third-party special needs trust is a more common type of trust where you are setting aside resources to be used for the benefit of a disabled beneficiary such as a child or elderly family member. These are used for individuals who qualify for government benefits such as Medicaid and Supplemental Security Income, as they are exempt from resource calculations that could otherwise impact their ability to participate in those programs.

There is also an alternative version of a third-party special needs trust called an ABLE account, which allows for family members to gift support funds to a tax free savings account for individuals with disabilities. These accounts allow for private funds to be used to support the quality of life of people with disabilities beyond the funds that they might have themselves or through government benefits. Family members and friends can donate as much as $18,000 every year collectively to these accounts.

First-Party Special Needs Trusts

The other type of trust is a First-Party special needs trust, which is used mainly in situations when an individual is applying for government benefit programs. It allows for someone to place their own assets in a special needs trust which is commonly used to repay any Medicaid liens when they pass away. There are three types of first-party special needs trusts, the first being a D(4)(a) trust, which is for people younger than 65 to hold large assets like an inheritance or legal settlement that would prevent them from getting benefits.

The second is a Pooled Trust, which is another way in which a person can transfer assets out of their control to maintain eligibility for Medicaid benefits. This places them in the care of a nonprofit entity that manages the trust for them and pays for certain benefits. The final type is a Qualified Income Trust, where an individual’s monthly income would preclude them from obtaining Medicaid. This takes any excess income and sends it into a trust where it will either be used to pay for the individual’s living expenses at a care facility or partially paid to their spouse.

Setting up a special needs trust can be daunting as it must cover many complicated potential outcomes and also abide by Florida’s Special Needs Trust Statute which governs all of these trusts. However, by working with an experienced special needs trust attorney in Orlando, you can have peace of mind that your wishes will be carried out even if you are not here to see them be fulfilled. Our team of skilled attorneys are more than prepared to help you accomplish your goals and set up a plan to care for you and your loved ones.

Why Choose The Kaplan Firm

Estate planning involves personal choices. In turn, attorney Mary Kaplan provides personalized and customized representation for her clients needing help with estate planning. She brings a background in both her private legal practice and her background at high-profile financial institutions.

From establishing your will to deciding on powers of attorney, she remains at your side and attends to all details to ensure that your documents work for you and your loved ones. For help with trusts, contact the firm online or call our Orlando office at 407-863-6175.