Do You Need a Fort Lauderdale Trust Lawyer?
People who want to protect their assets and their loved ones have several estate planning tools that can help them to accomplish these goals. One way to ensure that your assets and loved ones will be protected while also helping to protect your quality of life is to create an irrevocable trust. Fort Lauderdale trust lawyer Rhonda D. Zimmerman, Esq. can help you to understand your options and choose the right estate planning tools to accomplish your goals.
What Is An Irrevocable Trust?
There are two main types of trusts, including revocable trusts and irrevocable trusts. While revocable trusts can be changed or terminated by the grantor, irrevocable trusts cannot be modified or revoked by the grantor after they have been created. As the grantor, if you create an irrevocable trust, the assets you place in the trust will be owned by the trust. The trustee will control the assets held in the trust and will manage it, providing the trust beneficiaries with distributions.
Since you no longer own or control your assets once you place them in an irrevocable trust, this means that the assets held by the trust will be protected from creditors. The assets will also not be counted for Medicaid qualification purposes, and an irrevocable trust can also help to reduce any estate taxes you might owe by reducing the size of your estate.
Reasons For Creating An Irrevocable Trust
People choose to create irrevocable trusts for three main reasons, including reducing potential estate taxes, qualifying for Medicaid, and protecting their assets. If you have a very large estate, you might be concerned about reducing any estate taxes that your loved ones might have to pay once you die. While Florida does not have an estate tax, the federal estate tax applies to estates held by individuals that exceed $11.7 million in value or for married couples that exceed $23.4 million in value. If your estate’s value exceeds these amounts, any amount above these thresholds will be subjected to estate taxes at 40%. Creating an irrevocable trust is a good way to reduce your estate’s potential tax liability.
Some people also create irrevocable trusts to help them qualify for Medicaid. Many people need some type of nursing care when they become unable to care for themselves on their own. Careful Medicaid planning conducted well in advance of when you might need nursing home care can help you to reduce the size of your estate so that you can qualify. You can create a Medicaid irrevocable trust that allows you to receive income that is generated by the assets held by the trust, but you will no longer have the right to the assets or have control of them. Placing assets in an irrevocable trust removes them from your estate, and they will not be counted when you apply for Medicaid to pay for nursing home care. However, you should create an irrevocable trust to help you to qualify for Medicaid at least five years before you think that you might require care because of the Medicaid lookback period.
The final reason why some people create irrevocable trusts is to protect their assets from lawsuits and creditors. Professionals that might face lawsuits in the future can benefit by relinquishing control of their assets by creating irrevocable trusts. When the trust is created correctly and is properly funded by the assets, creditors will not be able to reach the assets held by the trust.
Speak With A Fort Lauderdale Estate Planning Lawyer
There are multiple estate planning tools that you can use to accomplish your goals and protect yourself and your loved ones. If you are interested in learning about irrevocable trusts or other estate planning tools, contact the Law Offices of Rhonda D. Zimmerman, Esq. today at (561) 672-7265.