Trusts: A Key Component of Your Estate Plan
At Amy McGarry Law Office, we believe that a well-structured estate plan should provide clarity, flexibility, and peace of mind. Trusts are one of the most powerful legal tools available to help individuals and families achieve these goals. Below, we offer a comprehensive overview to help you better understand how trusts work, their benefits, and how we can assist you in incorporating a trust into your estate plan.
What Is a Trust?
A trust is a legal arrangement that allows a third party, known as a trustee, to manage assets on behalf of one or more beneficiaries. Trusts can be created during a person’s lifetime (living trusts) or established upon death through a will (testamentary trusts).​
Types of Trusts
Choosing the right trust depends on your specific goals—whether you're planning for your family's future, protecting assets, or addressing long-term care needs. Below are several types of trusts commonly used in Florida estate planning:
Revocable Living Trust
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A revocable living trust is created during your lifetime and can be changed or canceled at any time while you are still living.
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It allows you to:
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Maintain control of your assets while alive
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Avoid probate by passing assets directly to beneficiaries
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Plan for incapacity by naming a successor trustee to manage the trust if you become unable to do so
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This type of trust is a flexible foundation for many estate plans.
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Irrevocable Trust
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Unlike a revocable trust, an irrevocable trust generally cannot be modified or revoked once it is established.
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This type of trust:
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Removes assets from your taxable estate
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Can help protect assets from creditors
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May assist in Medicaid planning when created and funded in advance
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Irrevocable trusts are often used for asset protection, tax planning, or gifting strategies.
Special Needs Trust
A special needs trust is designed to provide financial support to a loved one with a disability without affecting their eligibility for government benefits such as Supplemental Security Income (SSI) or Medicaid. Funds in the trust can be used for supplemental expenses like transportation, education, and medical care not covered by public programs.
Medicaid Planning Trust
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Also known as an irrevocable income-only trust or asset protection trust, this is used to preserve assets while helping an individual qualify for long-term care benefits through Florida Medicaid. If structured and funded properly in advance of the five-year Medicaid look-back period, this trust can:
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Protect the family home and savings
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Provide income to the healthy spouse
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Avoid the need to spend down all assets for nursing home care
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Testamentary Trust
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This type of trust is created through a will and takes effect only after your death.
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It is useful for:
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Managing assets for minor children or beneficiaries who may not be ready to handle an inheritance
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Setting specific conditions for when and how assets are distributed
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Offering ongoing oversight of funds through a named trustee
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Since a testamentary trust is part of your will, it does go through the probate process.
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Charitable Trust
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Charitable trusts are established to support a cause or organization you care about, while also offering potential tax benefits.
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Common forms include:
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Charitable Remainder Trusts (CRT) – Provide income to you or your beneficiaries for a period of time, with the remainder going to a designated charity
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Charitable Lead Trusts (CLT) – Provide payments to a charity first, with the remainder going to family or other beneficiaries
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Why Consider a Trust?
Avoid Probate
Assets held in a trust do not go through probate, allowing for a faster, more private transfer to beneficiaries.
Plan for Incapacity
A trust ensures your finances are managed according to your instructions if you become unable to make decisions.
Protect Beneficiaries
Trusts can control how and when your assets are distributed, protecting beneficiaries from financial mismanagement or outside influences.
Support Long-Term Care Goals
Certain trusts may assist in qualifying for Medicaid or shielding assets from long-term care costs.
Is a Trust Right for You? How We Can Help
Trusts are not one-size-fits-all. Whether a trust is the right tool for your estate plan depends on your personal goals, family circumstances, and the nature of your assets. At Amy McGarry Law Office, we take the time to understand your unique situation and develop a tailored strategy that fits your needs.
Our experienced team will guide you through every step of the trust planning process, including:
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Evaluating which type of trust is most appropriate for your objectives
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Drafting clear, legally sound trust documents
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Assisting with trust funding, including properly transferring assets
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Providing ongoing support with trust administration and updates
We are committed to making the process straightforward, thoughtful, and aligned with your long-term goals.
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