Irrevocable Trust Attorney in Ocala, Florida

If you're seeking a way to protect your assets from creditors, provide for your loved ones, or potentially reduce estate taxes, an irrevocable trust might be the right solution for you.  

An irrevocable trust is a legal document that allows you to transfer ownership of your assets to a trust, which then manages and distributes them according to your wishes. Unlike a revocable trust, an irrevocable trust cannot be easily changed or revoked once it is established. This means you relinquish control over these assets, but gain significant benefits in return. 

To create an irrevocable trust, you must transfer ownership of your assets to the trust. This includes real estate, bank accounts, investments, and other valuable property. Once transferred, these assets are no longer considered part of your estate, which can offer protection from creditors and potential tax advantages. 

To learn about your estate planning options, contact my law firm, Michael A. Siefert, P.A., in Ocala, Florida. I’m proud to work with clients and families throughout Marion County. Reach out to schedule an initial consultation. 

Benefits of an Irrevocable Trust 

• By placing your assets in an irrevocable trust, you protect them from creditors and legal claims. Since the trust owns the assets, they are not subject to claims against you personally, providing peace of mind for you and your beneficiaries. 

• An irrevocable trust can provide significant tax benefits. By removing assets from your taxable estate, you may reduce estate taxes. Additionally, certain types of irrevocable trusts, like charitable remainder trusts, can offer income tax deductions. 

• If you're planning for long-term care, an irrevocable trust can protect your assets from Medicaid spend-down requirements. By transferring assets to an irrevocable trust, you may still qualify for Medicaid while preserving your estate for your heirs. 

• Even though an irrevocable trust requires you to relinquish ownership, you can still maintain control over how and when your assets are distributed. This is particularly useful for providing for minor children and individuals with special needs, or ensuring your assets are used wisely over time. 

• Clearly outlining your wishes in an irrevocable trust can minimize potential family disputes. The legally binding terms of the trust reduce room for interpretation and disagreement among beneficiaries. 

Understanding Spendthrift Provisions 

A beneficiary's interest in an irrevocable trust set up for them by someone else is protected from their creditors if the trust agreement includes a spendthrift clause. This clause states that a beneficiary cannot assign or transfer their beneficial interest. It was originally designed to prevent a beneficiary from wasting their inheritance by giving away their trust interest. Essentially, if the trust document says a beneficiary can't transfer their interest voluntarily, then creditors can't force an involuntary transfer to pay debts. 

In Florida, courts consistently apply asset protection to irrevocable trusts. Florida law requires that a spendthrift provision must explicitly prevent both voluntary and involuntary transfers of a beneficiary's trust interest to protect it from creditors. However, once a trustee distributes money from a spendthrift trust to a beneficiary, that money is no longer protected from creditors. 

There are two exceptions to spendthrift protection in Florida. First, a trustee cannot withhold a distribution required by the trust agreement just to protect it from creditors. Overdue mandatory distributions can be garnished from a spendthrift trust. 

The second exception applies to "special creditors" or "creditors of last resort." These include claims from a beneficiary’s child, a former spouse seeking support and maintenance, and creditors (like an attorney) who have provided services to protect the beneficiary’s interest. These special creditors can garnish a beneficiary’s interest and distributions from an otherwise protected spendthrift trust. 

Irrevocable Trust FAQs 

What is a Self-Settled Irrevocable Trust in Florida? 

A self-settled irrevocable trust is a type of trust where the grantor, also known as the settlor, transfers their own assets into the trust while still benefiting from those assets. In Florida, a self-settled irrevocable trust can be used for asset protection and estate planning purposes. However, the grantor must abide by certain regulations and limitations to benefit from the protections offered by this type of trust. 

An irrevocable self-settled trust offers no asset protection benefits. According to Florida trust law, even if a self-settled trust agreement includes a spendthrift provision, the trustmaker’s assets transferred into the trust remain vulnerable to the trustmaker's creditors' claims. Florida courts consistently deny creditor protection to self-settled trusts due to public policy considerations. 

How long does it take to set up an irrevocable trust in Florida? 

Setting up an irrevocable trust in Florida typically takes up to 12 months, depending on the complexity of your estate and the specifics of your trust. Initially, you will need to consult with an experienced attorney to discuss your goals and gather all necessary information about your assets and beneficiaries.  

Drafting the trust document, which must meet stringent legal requirements, can also take time. Once the trust document is finalized, assets must be retitled in the name of the trust, a process that varies in duration depending on the asset type and the administrative procedures of financial institutions involved. Be prepared for additional time to address any legal or financial issues that arise. Ultimately, the thoroughness of this process ensures that your trust is solidly established to meet your estate planning needs. 

Are there any ongoing costs associated with managing an irrevocable trust? 

Yes, there are ongoing costs associated with managing an irrevocable trust. These costs can include trustee fees, which are paid to the individual or institution managing the trust. If you appoint a professional or corporate trustee, the fees may be a percentage of the trust’s assets.  

Additionally, there may be legal fees for ongoing legal advice and compliance with state and federal regulations. Other costs could involve accounting fees for the preparation of annual income tax returns and financial statements, as well as potential investment management fees if the trust’s assets are actively managed. It is essential to discuss these costs with your attorney and trustee to fully understand the financial commitment involved in maintaining an irrevocable trust. 

Can I create an irrevocable trust online? Or do I need a lawyer? 

While it may technically be possible to create an irrevocable trust online using various legal document preparation services, it is highly recommended to engage a qualified attorney. Setting up an irrevocable trust is a complex legal process that requires careful attention to detail, knowledge of state and federal laws, and an understanding of your specific financial and personal circumstances.  

An estate lawyer can help make sure that the trust document is properly drafted, all legal requirements are met, and your interests are fully protected. An attorney can also provide personalized advice, address any unique considerations, and help you navigate potential complications that may arise. Ultimately, working with a legal professional is the best way to ensure that your irrevocable trust is established correctly and effectively.