Tampa Trusts are estate-planning tools that help to ensure an easy transition of your assets after your death. Your Tampa Estate Planning Lawyer should offer useful guidance on how to choose a trustee, set up a trust, and any tax implications of Tampa Trusts.
Types of Tampa Trusts
There are two groups of Tampa Trusts; revocable and irrevocable trusts. The main difference, one can be revoked and the other cannot. However, the reason for selecting one or another usually has more to do with details about taxes, control, and ownership, than simply whether the creator would like the power to amend the trust.
A revocable trust, commonly referred to as a “living trust,” is the most commonly used type of trust for probate avoidance. In order to avoid probate, the person creating the trust, the “grantor,” transfers the title of their property into the Trust. Since the revocable trust owns the assets or property, rather than the person or person(s) making the trust, the assets will not have to be administered through the court. Therefore, when the person dies the property owned by the trust is not subject to probate.
When it comes to the control of a revocable trust, the grantor or grantors will retain the the ability to change, modify, alter, or entirely revoke the trust during the course of their lifetime. The grantor or grantors will also typically serve as the initial Trustee. Since the grantor or grantors maintain complete control over the trust assets while they are alive, the Tampa Revocable Trusts may be subject to claims by the grantor’s creditors. Upon death, a Tampa Revocable Trust becomes irrevocable. The successor trustee will merely have the power to administer the trust assets as the grantor has directed.
An irrevocable trust, by contrast, is one that cannot be changed, modified, altered, or revoked once it has been created. They are more commonly used for large estates in order to avoid the estate tax.
Setting up a Tampa Trust with Fresh Legal Perspective
Tampa Trusts, regardless if they are revocable or irrevocable, have some similar features. A Tampa Trust creates a mechanism for the transfer of legal ownership of assets or property from the property owner to the trust. The Tampa Trust assets are then managed and distributed by an individual or institution responsible for handling the property, which is called a trustee. The assets or property is held for the benefit of a third party, which we call the beneficiary.
A trustee often receives reasonable compensation for their management of the trust. Whether they are paid or not the trust creates a “fiduciary” relationship between the trustee and the beneficiary, this means they can only act in the interests of the beneficiary. The grantor, the individual who created the trust, may act as trustee. The grantor may also be a beneficiary of the trust.
Many factors can influence the procedure for setting up a trust, including the age of the beneficiaries, the size of the estate, and the marital status and family dynamic of the grantor. Your Estate Planning Lawyer provides their clients with information on how to select a Trustee, how to amend an existing trust, and why a trust might be useful to you.