What You Can Accomplish Through the Use of a Trust
Trusts are legal devices that come in a wide variety of forms, each with specific uses and benefits. While a trust is certainly not a magical solution to all asset protection problems, certain types — when properly drafted and set up far enough in advance — can provide significant benefits in the areas of tax savings, asset protection, Medicaid qualification and estate management.
There are some myths about what exactly trusts can accomplish. For instance, if you currently have creditors, you cannot protect your money from them by dumping it into a trust. You cannot shield assets from bankruptcy by putting them in a trust. Furthermore, gifts made in trust are usually treated the same way for Medicaid qualification purposes as gifts made directly to your friends or family. Nevertheless, there are still many things you can accomplish under the Florida Trust Code:
- A properly formulated spendthrift trust allows you to gift money to a loved one without that money being attached by his or her creditors.
- A special needs trust can allow you to gift property to a disabled relative without affecting his or her qualification for government benefits like SSI.
- If done at least five years in advance, a properly formulated irrevocable trust can protect assets from being used for long-term care expenses.
- A qualified income trust (QIT) can allow a person with too much income to qualify for Medicaid.
- Trusts can allow you to control how gifts you make are spent as well as protect them from waste by young or otherwise irresponsible beneficiaries.
Obtaining these benefits, however, requires proper drafting. That is why you should enlist the help of an experienced Florida estate planning attorney to find out what tools are available to meet your specific goals — and ensure those tools are properly used.