A trust is a common feature in many estate plans, and for good reason. A trust can offer you certain benefits and flexibility that you simply cannot achieve with a will and power of attorney. Therefore, your estate planning attorney in Daytona Beach may recommend you add a trust to your estate plan if you do not have one already.
One of the biggest benefits of having a trust in addition to a will is the avoidance of probate. Probate in Daytona Beach refers to the court-guided process through which your estate passes after you die. Probate can be:
Probate is initiated after you, the owner of assets, pass away. However, when you have a trust, it is the trust that owns your assets. And because a trust exists into perpetuity until it is dissolved, probate can often be avoided with a trust.
While there is no state inheritance tax in Florida, if your estate is worth more than $12.06 million, as of 2021, your heirs and beneficiaries may have to pay federal estate taxes if you have only a will. This would diminish the value of the assets your beneficiaries inherit.
The federal estate tax can claim anywhere from 18 to 40 percent of your estate over the $12.06 million threshold. For example, if your estate’s value was $13.06 million, the federal estate tax could claim anything between $180,000 and $400,000.
A trust, though, is an excellent and effective way to avoid federal estate taxes. Because the beneficiaries of a trust do not inherit anything, these beneficiaries do not need to pay any inheritance taxes.
Aside from these benefits, trusts also offer other advantages over just a will. Trusts give you greater flexibility to decide how your assets will be managed after you pass. If you have minor children or grandchildren, a trust can give you the opportunity to provide for their education even though that may be decades after you pass away.
If you have unique family dynamics, such as children from multiple marriages, a trust may allow you to navigate around laws of intestate succession. This can enable you to provide a benefit to those children and relatives who might not otherwise be entitled to receive a portion of your estate.
Finally, in addition to all these benefits and advantages, trusts are not especially time-consuming to set up. An estate planning attorney in Daytona Beach can craft a trust in short order based on your goals and objectives.