A revocable trust offers the Giver a number of extraordinary benefits and opportunities. By 2011, the land tax will rise to 55 percent for everything over the first million dollars. A million dollars may sound like a huge amount of money, but it’s actually very small when you consider that it includes life insurance proceeds, the value of your home, stocks, bank accounts, retirement accounts, jewelry, paintings, and anything else you own. may have the title in your name at the time you die. This tax has bankrupted the family.
Using a revocable trust as the core of a basic real estate plan, we were able to double the Federal estate tax coupon amount from $1 million to $2 million, saving your beneficiaries $550,000.
Beyond property tax protection, distributing assets through a revocable trust will avoid probate completely. A will is the process of collecting all the assets that are entitled in the name of the deceased. These assets may include homes, cars, bank accounts, and even life insurance policies or retirement funds. Many people believe that having a will will avoid a will, but a will will be necessary regardless of whether the deceased person has left a will or not.
An estate will will typically cost between four and seven percent of the value of the entire estate and can bind your assets between six and eighteen months, without any contest or challenge. In addition, the probate process is announced and shows your family’s dirty laundry for your entire community to see.
A third benefit of using a revocable trust is the ability to control your assets long after you leave. In Florida, a person can retain control of his or her assets for up to 360 years after death. Usually, we design a trust to control assets until a grandchild reaches a certain age or reaches a certain goal. Access restrictions are not always determined by the age of the beneficiary. Sometimes you need to protect a child from their bad financial tendencies. Sometimes you need to make accommodations for children who receive financial assistance from the government by creating a special needs trust. For any and all considerations and concerns, a revocable trust will allow you to distribute your assets in a way that best suits your life and that of your loved ones.
Another benefit of using a revocable trust is the automatic asset protection that you can provide to your beneficiaries. When your assets are distributed through a will, the beneficiaries receive the assets directly without protection. A bad divorce, car accident, lawsuit or even existing creditors can take those assets away from your beneficiaries. However, when you distribute your assets through a revocable trust, your beneficiaries will receive the assets in the trust. They will have as much access as you want to give them, but the assets will be protected from creditors, litigation, divorce, or other financial threats your beneficiaries may face.
There are countless reasons to make a revocable trust the centerpiece of your comprehensive property plan. If you have assets worth more than $75,000, a revocable trust is a virtual necessity. For more on Revocable Trusts, please contact your South Florida asset protection and planning attorney. A trust is a very complex document and should not be attempted without the guidance of a legal professional who specializes in the matter.