When you want to pass your assets to heirs, having an estate plan is critical; otherwise, your assets will go through probate. This could result in outcomes that you never wished for your heirs. Someone you may want to cut out of your will could receive your assets or your heirs could take on a heavy tax burden. Florida has a unique set of regulations and laws that can help minimize these costs and leave more for your family. These statutes and guidelines empower you to establish a range of trusts, each serving distinct purposes. These include bypassing probate, reducing tax obligations, distributing funds in fixed amounts for financially vulnerable family members, and more.
Why Estate Tax Planning in Florida is Important
Many people retire to Florida because of its weather and lack of state income tax. However, the federal government seeks its share after you pass. An estate planning attorney can help you set up a trust to minimize that tax burden.
Another very important reason for using an estate lawyer to help you set up a plan is that anything can happen at any time. A trust can help with asset protection should you become incapacitated. It can also allow a loved one to handle your affairs until you are well enough to do it yourself.
You do not have to be a certain age to create an estate plan. In fact, if you are over 18 and own assets, regardless of the value, you should create an estate plan.
Types of Trusts for Minimizing the Estate Tax Burden
Florida has several types of trusts that can help minimize your tax burden, including:
Revocable Living Trust
One of the most common trusts in Florida is a revocable living trust. This flexible estate planning tool allows you to keep control over your assets during your lifetime and specifies how your assets should be distributed upon your death. A revocable living trust can help avoid probate and minimize estate taxes.
Irrevocable Life Insurance Trust
When you need a trust to hold life insurance policies, you can use an irrevocable life insurance trust. When you place your life insurance policies in this trust, the proceeds from the policy can be excluded from the taxable estate. This trust is needed (but not required) if your estate is valued at over $12.92 million.
Qualified Personal Residence Trust
You can transfer your primary residence to a qualified personal residence trust and still keep your right to live in it for a certain number of years as dictated by the trust. In the trust, list the number of years you expect to live – you have a right to stay in the house until then. This is one of the ways you can minimize your tax burden. If you are still alive when the time ends, you can pay rent to the estate, which further reduces your estate tax burden.
Charitable Remainder Trust
When you wish to give to a charitable organization, you can choose a charitable remainder trust. Any assets placed in this trust provide income to beneficiaries for a set time. If there is anything left in the trust, the remaining assets go to the charity you choose.
Use a dynasty trust to provide for multiple generations. You can preserve wealth for the long term, plus reduce estate taxes for each generation so that your grandchildren and great-grandchildren can enjoy your wealth. The asset protection attorneys at France Law Firm can help you set up a dynasty trust.
Contact France Law Firm
While Florida offers many benefits because of its tax laws, the federal government is still going to use the long arm of the Internal Revenue Service to collect what it can get. You can use one or more trusts to minimize the tax burden for your heirs. Contact the probate attorneys at France Law Firm for a consultation to discuss a new estate plan or to update a current estate plan.