To start with the basics, a trust is a legal device that lets a person designated as a “trustee” (who is usually an unrelated third party) take care of, and provide direction for, assets that are placed into a trust fund. Importantly, the trustee holds and makes decisions about the trust funds for the benefit of a beneficiary.
Now, when you hear the terms “trust” or “trust fund,” you most likely think of’ a very wealthy family that has a large estate, maybe even a mansion, and has a lot of wealth that was passed down from many generations. While that is a common image of the kinds of individuals who would take advantage of a trust, you really don’t have to be part of the richest 1% to create and enjoy the benefits of a trust.
In this article, we are going to talk about a private trust in particular. We are going to cover the difference between a private and public trust, and we’re going to talk about the many benefits that come from having a private trust, regardless of your income or net worth.
If, after reading this blog, you have more questions about trusts and your own estate planning, then we invite you to call the seasoned estate planning attorneys in North Palm Beach at Doane & Doane. You can contact us at 561-656-0200. Let us help you plan your future with proper estate planning.
The Difference Between a Private and Public Trust.
Before getting into the nitty-gritty of the advantages of having a trust, it is important to understand the difference between what is a private trust, and what is a public trust.
A private trust is typically a trust created to benefit a few people, typical people within one family. A public trust, by contrast, is a trust that is created for a charitable purpose. In fact, public trust is often referred to as a “charitable trust” for that reason.
A big difference between public trust and private trust is the way they are enforced. As noted earlier, the trustee is responsible for the assets that are in the trust fund. One of the major ways in which the trustee’s actions are kept in check is by bringing an action to enforce the rules of the trust.
With a private trust, the rules of the trust are enforced by the beneficiaries of that trust. Yet, with the public trust, the state attorney general in the state in which the trust was created is the party that would enforce the rules of trust.
That means, therefore, a private trust must have defined beneficiaries. The reason is that you need beneficiaries to enforce the trust.
Unlike a private trust, public trust does not need beneficiaries. The state attorney general, on behalf of the public, is there to enforce the trust. It is important to note, however, that public trust can have defined beneficiaries, even though it does not have to.
What Advantages Come with Creating a Private Trust?
Regardless of your income level or net worth, having a private trust can be beneficial to your estate planning. There are a number of reasons to use a private trust, including:
1. To create a structure for investments, by investors of your choice, and according to the rules that you set yourself.
2. To set standards on how, when, and why your beneficiaries would receive certain funds in accordance with your own personal values and desires.
3. To enjoy the tax benefits that come with the trust, and there are many.
4. To allow for an efficient way to transfer your assets both during your lifetime and after you have passed.
5. To protect wealth for future generations in your family.
In sum, the reason to create a trust is to make sure that your assets are protected, managed, and ultimately transferred in line with your own wishes when you know you are no longer able to make those decisions yourself.
A seasoned estate planning attorney can help you figure out what is a private trust, and which trust options are best for you. The advice could include an irrevocable trust while you are still alive, or it could be a revocable trust to give some protection against creditors and minimize state taxes.
Overall, trusts give you the peace of mind that comes with knowing you have put a plan in place to provide for the management of the family’s assets according to your own objectives. Remember, you do not need to have massive wealth to create trust. Depending on your circumstances, a trust can be an important part of any person’s estate plan. What is most important is that you have an experienced estate planning attorney to help you.
Look to Doane & Doane for Help with a Private Trust
Founded in 2003 by husband and wife legal team, Randell C. Doane and Rebecca G. Doane, Doane & Doane provides legal and financial services to families, individuals, and businesses throughout southeast Florida.
Estate planning is about much more than just giving away property. It is an act of love and kindness, with the ultimate goal of providing for the future financial security of your loved ones and/or the charity of your choice – particularly during the Covid-19 pandemic.
At Doane & Doane, our attorneys help people plan for retirement, make provisions for loved ones, and minimize tax liability. Our experienced estate planning attorneys know which tools to use to get the best results for their clients. Our lawyers can help you determine which tools are best suited to your specific circumstances.
In addition, when it comes to probate matters, such as the formal administration of an estate, Florida fiduciaries seek the assistance of the attorneys at Doane & Doane, P.A. to administer and manage their trusts and estates. Notably, the founding partners of Doane & Doane are board-certified West Palm Beach Probate Attorneys. With the additional advantage of certified public accountancy in their backgrounds, they present a unique combination of skills and experience which enables them to effectively settle, administer, and manage clients’ trust and estates.
Call us at Doane & Doane, P.A., for estate planning services in Florida. You can reach us at 561-656-0200. Call the estate planning attorneys in Palm Beach, FL at Doane & Doane today, at 561-656-0200.