When you hear the phrase “trust fund,” you might immediately think of heiresses and high-level socialites who benefit from money set aside by their families. What you might not realize, though, is that trusts have a much wider application for Florida benefactors than simply providing extraordinary amounts of money for a child. In fact, you do not have to be wealthy to choose to administer a trust. In the right circumstances, a trust can help even modest estates correctly distribute wealth, allowing benefactors to avoid crippling estate taxes and other penalties.

Most attorneys who oversee estate planning say their clients tend to object when a trust is suggested, especially if they do not think themselves wealthy. Sadly, experts say that few people really understand the estate planning process until their own parents die, and they do not realize the benefits that could come from using a trust as part of a comprehensive estate strategy. In facts, trusts can augment an existing basic estate plan that includes no more than a will, power of attorney and living will.

Some people may be intimidated by the idea of using a trust because it seems so complicated. Although the set-up process may require some time, trusts are ultimately much easier than many other estate planning tools. That is because trusts allow for the quick and simple transfer of assets almost immediately after your death.

Those seeking estate planning assistance should know that a variety of trusts exist to ease the financial transition after you pass. You can set up a trust that goes into effect while you are still living, known as a living trust, or consider establishing a testamentary trust that is only viable after your death. These trusts each have their benefits and drawbacks. It is important to educate yourself about the usefulness of trusts before you eliminate the possibility of their use in your own estate plan.

Luis E. Barreto