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An overview of testamentary trusts

Of the many different estate planning tools that Florida residents can consider, trusts are becoming a very popular choice. While there is nothing wrong with setting up an estate plan in which a will is the bedrock document, there are some people who find that establishing a trust is a better option. But, as those among our readers who are familiar with previous posts here know, there is a wide variety of trusts to consider. One popular option is known as a "testamentary trust."

A testamentary trust is typically created as part of a combination of establishing the terms of a will and then the creation of the trust. The terms of the will dictate that, upon death, the person's assets are to be transferred to the testamentary trust. Therefore, the assets remain in the ownership of the person who established the estate plan all the way up until death. It is only upon death that ownership transfers to the trust.

The drawback to a testamentary trust is that the assets in question, before they can be transferred to the trust, have to go through the probate process. While the trust is established beforehand, it is the assets being transferred to the trust that takes place upon death.

Although many people in Florida are beginning to realize the benefits of including a trust in their estate plans, there will usually be a lot of questions that need to be answered. Any Florida residents who are considering including a trust as part of their estate plans will want to make sure they have the right information about establishing a trust and trust administration.

Source: FindLaw, "Trusts: An Overview," Accessed Feb. 12, 2017

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