Fergeson, Skipper, Shaw, Keyser, Baron & Tirabassi, P.A., is an established boutique law firm that caters to the needs of business owners, professionals and individuals throughout Florida. We are led by a skilled team of lawyers that is committed to delivering quality legal services. Our firm is located in Sarasota. We serve clients throughout Florida in complex estate planning, probate litigation and other estate matters.
Establishing a Trustee
Most beneficiaries are not accustomed to the responsibilities of managing large sums of money. To assist with this process, you can designate a trustee for the trust who will be responsible for investing the trust assets. Many people choose a trustee who has significant experience with such matters such as a corporate trustee.
You can also appoint the beneficiary to serve as a co-trustee of the trust (commonly with a corporate trustee). In the beneficiary's capacity as a co-trustee, he or she can participate in decisions as to how much of the trust's income and principal will be distributed to the beneficiary and his or her descendants. In this situation, the beneficiary does not lose control of the trust assets. You can also include a provision in the trust that allows the beneficiary to terminate the services of the corporate trustee and hire another one.
It is important to know that the beneficiary is never permanently locked into a relationship with the initially designated corporate trustee. The corporate trustee's job is to prevent exploitation of the trust beneficiaries by potential predators. Our lawyers can explain your options to you and assist you with the entire process of establishing a trustee.
What You Should Know About Trusts
Here are a few important things to know about establishing a trust:
- In most kinds of trusts, the value of assets is not subject to federal estate tax upon the death of the beneficiary.
- The court cannot award the assets in a trust to the beneficiary's spouse if the beneficiary obtains a divorce.
- A trust cannot be reached by the beneficiary's creditors if the beneficiary has financial problems.
- If sufficient generation-skipping transfer tax exemption is allocated to a trust, it will be protected from taxes upon the beneficiary's death, even if the assets are distributed to grandchildren and other descendants.
- If you do not have children, you can establish that the assets of the trust will be added to trusts you have created for other descendants.
Trusts and a Beneficiary's Spouse
The trust assets will not be subject to the control of a beneficiary's spouse (such as a son or daughter-in-law, or your widow or widower's next spouse), which could be the case if the assets were distributed outright to the beneficiary and the beneficiary was to die, leaving all of his or her assets to his or her surviving spouse and not the beneficiary's descendants.
If you choose, the income produced by the assets in the trust can be paid to the beneficiary's spouse, allowing him or her to enjoy the benefits of the assets while he or she stays in the family. (However, the beneficiary's spouse would not obtain any control over the assets.)