For many estate owners in Florida, the most important part of a will is naming who they want to inherit their assets. However, there are several types of assets that are not transferred using a will.
For example, a person purchases a life insurance policy explicitly for the benefit of the named beneficiary. IRAs, 401(k)s and other types of retirement accounts also pass using a beneficiary designation as can bank and brokerage accounts.
Real estate can be passed based on how it’s titled as well. A couple may jointly own a property. However, it’s important to make sure everything is titled correctly so that the property passes as intended.
Some estate owners may create a revocable trust. Established while a person is still alive, this type of trust requires assets to be titled so they can be placed in the trust. Failing to title these assets correctly is a common estate planning error. Trusts can provide more privacy and speed than the probate process. Estate owners should make sure they understand how titling assets could impact their taxes.
Trusts may be useful in a number of other ways. For example, they might be used to control how distributions are made to beneficiaries and to protect them from spending inheritances irresponsibly. Trusts can also ensure that relatives with special needs are able to keep drawing benefits while being taken care of with family funds. A creator has less power over irrevocable trusts, but they can be designed to protect assets against creditors or ex-spouses in case of divorce. An attorney may be able to help a client understand how a trust can be useful in their particular situation.