Trusts are useful estate planning tools. They allow individuals to structure the ownership and distribution of their assets and wealth to accomplish their lifetime goals and protect their money from taxation. Floridians have a number of trust types to choose from when they meet with their estate planning attorneys to develop their long-term estate plans.
One important form of trust that some seniors may wish to consider is the Totten trust. This form of trust brings with it the benefit of avoiding probate after the death of its creator. This post discusses Totten trusts in the greater context of estate planning, but all readers should remember that no legal advice is provided herein.
Avoiding probate with a Totten trust
In Florida and jurisdictions throughout the country, probate is the legal process through which a decedent’s bills are paid, financial affairs are sorted out, and beneficiaries are given their inheritances from the decedent’s end of life estate. While probate serves an important role in the administration of estates, it is a lengthy and sometimes costly process for the families of decedents. Many people want to avoid probate if they can.
A Totten trust keeps covered assets out of probate. Also called a payable on death account, a Totten trust is a revocable device that holds property for a specific account or item of wealth. When the creator of the trust dies, the property passes directly to a named beneficiary as an automatic transaction. Because of the creation of the trust and structuring of the assets’ ownership, the assets in the Totten trust stay out of probate.
Using trusts to accomplish estate planning goals
As mentioned, there are many different kinds of trusts available to men and women under the law. Some are revocable, and others are irrevocable. Some can be set up for the benefit of others, and some are useful, like Totten trusts, in the avoidance of probate.
A knowledgeable estate planning attorney can provide their clients with more information about all kinds of trusts. With their support, their clients can develop strong and effective estate plans to meet their specific needs and goals.
