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Factors for determining benefits of a trust

Florida readers may be wondering if setting up a trust is the right thing for them to do. A review and analysis of each person's situation can help to determine if a living trust is beneficial.

The types of assets held by a person can be a significant determiner on if a trust is needed or not. The usual purpose for setting up a trust is to avoid probate, but there are numerous assets with designated beneficiaries that are excluded from probate without a trust. These include joint accounts, retirement accounts, life insurance and annuities. Some states even allow designation of beneficiaries on regular bank accounts and real estate.

Estates going to a surviving partner or those that are of a small enough value may qualify for a simple probate process in some states. The cost of probate in a state is also a consideration when determining the value of a trust. Both the cost of probate and the cost of setting up a trust can be balanced against each other to determine the more benefit for the lesser cost. Another consideration for some residents the real property they may own in another state. This could be a factor for many retirees. Without a beneficiary deed, the property could be subject to the other state's probate rules.

Input from an attorney could be very valuable when a person is evaluating the need for a trust. Every individual's situation may be evaluated in light of the rules for the state where the person resides and where he or she has property, and an attorney could help develop a strategy that protects the value of assets as they are passed on to beneficiaries and heirs.

Source: Forbes, "Should You Have A Trust?", Erik Carter , September 12, 2014

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