Your Florida estate plan might include any number of different components, and some possible inclusions may give you more power than others. For example, while a will is a key part of any estate plan, there are limits to what a will enables you to do.
According to Kiplinger, a trust is a type of fiduciary arrangement that involves you giving someone you name trustee control over the distribution of certain assets. A trust also gives you more control over certain matters than a will does. Here are three specific powers a trust gives you that a will typically does not.
1. The power to protect assets from creditors
If any of your beneficiaries have creditors or judgments against them and you leave money behind in a traditional will, those creditors may be able to take that money – unless you enter it into a trust. Once you place assets into a trust, they become untouchable to creditors.
2. The power to set stipulations about distributions
When you create a trust, you have the option of determining when and how your trustee makes distributions to your beneficiaries. For instance, you may want your trustee to make distributions when a beneficiary graduates college, remains drug-free for a certain period and so on.
3. The power to protect public assistance eligibility
Creating a trust may also prove worthwhile if you have one or more beneficiaries who are Medicaid recipients, or recipients of other types of means-tested government benefits. Leaving those beneficiaries assets in a will may otherwise make them ineligible for public assistance in the future.
While creating a trust may help you do any of the above-mentioned things, there are many other reasons you may also want to include one in your estate plan.