Susie
09-26-2006, 08:16 PM
Hii
I got this info from
http://www.floridabar.org/tfb/TFBConsum.nsf/48e76203493b82ad852567090070c9b9/d800a8b18744ece185256b2f006c5ebb?OpenDocument
WHAT IS A TRUST?
In simple terms, a trust is a relationship in which a person transfers something of value, called an "asset", to another person, called a "Trustee." The Trustee then manages and controls this asset for the benefit of a third person, called a "beneficiary". Individuals, banks, trust companies or corporations may all serve as trustees.
Why create a trust? Some people use trusts for personal reasons relating to their own particular family situation; others use trusts to reduce income, gift, or federal estate taxes. All trusts should be created with both considerations in mind.
Frequently, a trust is used to provide flexible control of assets for the benefit of minor children. In Florida, minor children cannot legally handle their own financial affairs before they reach the age of 18. Parents sometimes want their children to be even older before they are allowed full use of their gifts or inheritance. By establishing a Trust, parents can select a Trustee and specifically instruct the Trustee how to use the assets for the benefit of the children. They can also allow the Trustee much more flexibility in managing these assets than a legal Guardian would have. This kind of trust often comes into effect when both parents have died. It is usually set up to provide for the support, care, and education of the children until they have reached the age set by their parents.
You can also create a trust during your lifetime and act as Trustee yourself. If set up properly, this type of trust becomes a will substitute. Upon your death or disability, a successor Trustee would either continue managing the trust, or would simply distribute the trust assets according to your directions. The benefit of this kind of Trust is that assets in trust are not considered part of the probate estate. The advantage of avoiding probate is that the trustee can act without court approval to use the assets for the beneficiary. Also, avoiding probate often reduces expenses.
Sometimes, trusts are created between a husband and wife in order to avoid having their assets subjected to federal estate taxes twice--once when one spouse dies and then again when the other spouse dies. If everything is properly arranged, the couple's assets can be given to their children when the last parent dies with less total federal estate tax having been paid.
Remember that creating a trust might have significant income, gift, or federal estate tax consequences that are too complicated to explain fully here. All trusts should be reviewed by an accountant or attorney for an opinion as to the tax consequences.
If you believe you need legal advice, call your attorney. If you do not have an attorney, call The Florida Bar Lawyer Referral Service at 1-800-342-8011, or the local lawyer referral service or legal aid office listed in the yellow pages of your telephone book.
I got this info from
http://www.floridabar.org/tfb/TFBConsum.nsf/48e76203493b82ad852567090070c9b9/d800a8b18744ece185256b2f006c5ebb?OpenDocument
WHAT IS A TRUST?
In simple terms, a trust is a relationship in which a person transfers something of value, called an "asset", to another person, called a "Trustee." The Trustee then manages and controls this asset for the benefit of a third person, called a "beneficiary". Individuals, banks, trust companies or corporations may all serve as trustees.
Why create a trust? Some people use trusts for personal reasons relating to their own particular family situation; others use trusts to reduce income, gift, or federal estate taxes. All trusts should be created with both considerations in mind.
Frequently, a trust is used to provide flexible control of assets for the benefit of minor children. In Florida, minor children cannot legally handle their own financial affairs before they reach the age of 18. Parents sometimes want their children to be even older before they are allowed full use of their gifts or inheritance. By establishing a Trust, parents can select a Trustee and specifically instruct the Trustee how to use the assets for the benefit of the children. They can also allow the Trustee much more flexibility in managing these assets than a legal Guardian would have. This kind of trust often comes into effect when both parents have died. It is usually set up to provide for the support, care, and education of the children until they have reached the age set by their parents.
You can also create a trust during your lifetime and act as Trustee yourself. If set up properly, this type of trust becomes a will substitute. Upon your death or disability, a successor Trustee would either continue managing the trust, or would simply distribute the trust assets according to your directions. The benefit of this kind of Trust is that assets in trust are not considered part of the probate estate. The advantage of avoiding probate is that the trustee can act without court approval to use the assets for the beneficiary. Also, avoiding probate often reduces expenses.
Sometimes, trusts are created between a husband and wife in order to avoid having their assets subjected to federal estate taxes twice--once when one spouse dies and then again when the other spouse dies. If everything is properly arranged, the couple's assets can be given to their children when the last parent dies with less total federal estate tax having been paid.
Remember that creating a trust might have significant income, gift, or federal estate tax consequences that are too complicated to explain fully here. All trusts should be reviewed by an accountant or attorney for an opinion as to the tax consequences.
If you believe you need legal advice, call your attorney. If you do not have an attorney, call The Florida Bar Lawyer Referral Service at 1-800-342-8011, or the local lawyer referral service or legal aid office listed in the yellow pages of your telephone book.