Seminole Irrevocable Trusts Lawyer
An irrevocable trust cannot be changed or amended by the donor. Any property placed into the trust may only be distributed by the trustee as provided for in the trust document itself. For instance, the donor may set up a trust under which he or she will receive income earned on the trust property, but that bars access to the trust principal. This type of irrevocable trust is possible for Medicaid planning, though rarely used.
Testamentary Trusts
As noted above, a testamentary trust is a trust created by a will. Such a trust has no power or effect until the will of the donor is probated. Although a testamentary trust will not avoid the need for probate and will become a public document as it is a part of the will, it can be useful in accomplishing other estate planning goals. For instance, the testamentary trust can be used to reduce estate taxes on the death of a spouse, provide for the care of a disabled child or provide for children who are not responsible with their money and/or have creditor problems.
Supplemental Needs Trusts a/k/a Special Needs Trusts
The purpose of a supplemental needs trust is to enable the donor to provide for the continuing care of a disabled spouse, child, relative or friend. The beneficiary of a well-drafted supplemental needs trust will have access to the trust assets for purposes other than those provided by public benefits programs. In this way, the beneficiary will not lose eligibility for benefits such as Supplemental Security Income, Medicaid and low-income housing. This is typically are remainder trust under a will or living trust.
Credit Shelter Trusts
Credit shelter trusts are a way to take full advantage of the estate tax exemption. The first $2 million (in 2006) of an estate are exempt from taxes, so theoretically a husband and wife would have no estate tax if their estate is less than $4 million. However, if one spouse dies and leaves everything to the surviving spouse, the surviving spouse may have an estate that is greater than $2 million. When the surviving spouse dies, any part of the estate over $2 million will be subject to estate tax.
To avoid this problem, the spouses can create a credit shelter trust as part of their estate plan. When one spouse passes away, the first $2 million of that spouse's estate is put in to a trust. The surviving spouse can receive income from the trust, but as long as he or she does not control the principal, the money will not be included in the surviving spouse's estate when he or she passes away.
To schedule an initial consultation to discuss an irrevocable trust, call us at 727.475.6680 or contact us online any time.
