Say you want to do what most estate planners in Florida want to do: leave your assets to your chosen heirs and beneficiaries with as little tax liability and probate friction as possible. Unfortunately, what happens in many cases is that unforeseen incidents in beneficiaries’ lives result in the quick draining of inheritances.
For instance, maybe one of your heirs gets divorced, and part of the money you intended for your loved one ends up, via a divorce settlement, in the bank account of the ex-spouse. Or maybe an heir runs into legal or financial trouble, and a creditor tries to scoop as much of your hard-earned former assets out of your loved one’s hands.
These things happen.
But aside from using a will to leave a lump sum of money to an heir, there are other estate planning methods for protecting your assets even after you have passed away. For instance, Orlando residents have the option of creating a trust that allows beneficiaries to access funds over the course of their lifetime. One of the best aspects of this kind of trust is that creditors, including ex-spouses, can’t siphon from the fund.
You can also stipulate that the beneficiaries are also the trustees, who can in turn appoint their co-trustees.
Sometimes, when a beneficiary runs into financial problems, his or her creditors might try to lock down and draw money from the trust account. This is why it is important for estate planners to discuss the terms of their trusts with the beneficiaries. A beneficiary facing this unfortunate debt situation can have the attorney who drafted the trust inform the creditor and the creditor’s attorney that they cannot legally touch the trust account.
For Florida residents who would like to learn more about the full range of estate planning options, our Orlando trust and will page offers some key information.
Source: floridatoday.com, “Inheritance issues aren’t so cut-and-dry,” Stephen Lacey, April 15, 2013