If you have begun your Florida estate plan, you likely already know that you have a variety of trusts from which to choose. You also likely know that trusts come in two basic kinds: revocable and irrevocable. But do you know the differences between the two types?
US News explains that, of the two types of trusts, a revocable trust gives you the most control and flexibility. Why? Because, as its name implies, you can change a revocable trust, or even revoke it, at any time in the future after you establish it. Conversely, when you establish an irrevocable trust, its provisions are more or less set in concrete and you cannot change anything about it if you change your mind in the future.
Fundamental trust attributes
No matter which type of a trust you establish, it will contain, at minimum, the following three attributes:
- You will designate one or more beneficiaries, i.e., the person(s) or entity/ies who benefit from the trust.
- You will designate one or more trustees, i.e., the person(s) or entity/ies who you want to manage the trust’s assets and ultimately distribute them to the beneficiary or beneficiaries.
- You will place whatever assets you choose into the trust.
Remember, whatever assets you place into your trust no longer belong to you personally. Instead, the trust owns them. You can, however, continue to control them if you name yourself as trustee of the trust. You likewise can continue to benefit from the trust’s assets and the income they produce even though you no longer own them outright. You do this by naming yourself as one of the trust’s beneficiaries.
As previously stated, you cannot later change or revoke an irrevocable trust. Therefore, make sure to decide exactly what you want to do and how you want to do it before you establish one. You will be “stuck” with those decisions for the rest of your life.
This is general educational information and not intended to provide legal advice.