Would a living trust help you allow for spouse to receive monthly income and preserve principle?
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A living trust in Florida is a legal way to benefit from the ownership of property without personally owning that property. At the election of the trust creator, called the "trustor," a living trust in Florida can take the form of either revocable or irrevocable. Both forms of living trusts provide a legal mechanism for avoiding probate, and in some instances protecting property from creditors and taxes.
A revocable living trust is a trust that the trustor can terminate, or revoke, at any time and without anybody's consent. On the other hand, a trustor must obtain consent from the trustee and the beneficiaries before terminating an irrevocable living trust. The advantage of an irrevocable trust in Florida, though, is that it can protect property from personal creditors. An irrevocable trust also provides tax savings in many instances.
A trust may be revocable or irrevocable. A trust can be used to perform many different functions, such as reducing or avoiding tax liability, easing lifetime financial management, protecting assets, preserving family wealth, ensuring continuity of a family business, donating to charities, voiding forced heirship laws, or create a pension scheme for employees or dependents. A properly structured and administered trust may produce substantial savings in income tax, capital gains tax and inheritance tax/estate taxes. By establishing a trust, probate delays, expenses, and requirements can be avoided. A trust allows a person to provide for those who may be unable to manage their own affairs such as infant children, the aged, or persons suffering from certain illnesses. Trusts provide flexibility in distributing its assets to beneficiaries according to the terms of the trust document. Rather than distributing shares to heirs, wealth may be retained in one fund and distributed in a specified manner, protecting trust beneficiaries from spending all their inherited property.
A trust can be created during a person's lifetime and survive the person's death. A trust can also be created by a will and formed after death. Forms, such as those linked to below may be used to create a trust without the assistance of an attorney. Once assets are put into the trust they belong to the trust itself, not the trustee, and remain subject to the rules and instructions of the trust document. Most basically, a trust is a right in property, which is held in a fiduciary relationship by one party for the benefit of another. The trustee is the one who holds title to the trust property, and the beneficiary is the person who receives the benefits of the trust. Real property is typically transferred by way of a fiduciary or trustee’s deed. While there are a number of different types of trusts, the basic types are revocable and irrevocable.
A revocable living trust may be amended or revoked at any time by the person or persons who created it as long as he, she, or they are still competent. A living trust agreement gives the trustee the legal right to manage and control the assets held in the trust. It also instructs the trustee to manage the trust's assets for your benefit during your lifetime and names the beneficiaries (persons or charitable organizations) who are to receive your trust's assets when you die. Revocable trusts are extremely helpful in avoiding probate. If ownership of assets is transferred to a revocable trust during the lifetime of the trustmaker so that it is owned by the trust at the time of the trustmaker's death, the assets will not be subject to probate.
The trust document gives guidance and certain powers and authority to the trustee to manage and distribute your trust's assets.
The trustee is a fiduciary, which means he or she holds a position of trust and confidence and is subject to strict responsibilities and very high standards. For example, the trustee cannot use your trust's assets for his or her own personal use or benefit without your explicit permission. Instead, the trustee must hold and use trust assets solely for the benefit of the trust's beneficiaries
Irrevocable trusts are trusts that cannot be amended or revoked once they have been created. These are generally tax-sensitive documents. Some examples include irrevocable life insurance trusts, irrevocable trusts for children, and charitable trusts. With an irrevocable trust, all of the property in the trust, plus all future appreciation on the property, is out of your taxable estate. They may also be used to plan for Medicare eligibility if a parent enters a nursing home.
A trust created in an individual's will is called a testamentary trust. Because a will can become effective only upon death, a testamentary trust is generally created at or following the date of the settlor's death. They do not address the management of your assets during your lifetime. They can, however, provide for young children and others who would need someone to manage their assets after your death.
Florida law is very general regarding the form that a trust document must take. And Florida law is even more general regarding the terms and conditions that the living trust can or must contain. Generally, then, trustors in Florida are relatively free to include whatever terms and conditions they want in their trust document. The most important provision relate to how the trustee should manage the property, and even more importantly, how the trustee should distribute trust property and income to the beneficiaries. Finally, the trust document can include instructions for what happens to the trust when the trustor dies. For example, the trust could stay in operation and nothing changes when the trustor dies, or the trust could terminate and one or more of the beneficiaries receive all of the trust property.