Trusts 101: What Are They and How Do They Work?

Trusts 101: What Are They and How Do They Work?

Creating a strong estate plan involves more than just writing a will. For many individuals and families, establishing a trust is a practical and strategic way to manage and transfer assets. At the Law Office of Petrovitch & Kutub, we guide clients in West Palm Beach and across Florida through trust planning with clarity and care. Understanding what a trust is and how it works can help you make informed decisions about your estate and legacy.

What Is a Trust?

A trust is a legal arrangement that allows one party (the trustee) to hold and manage assets for the benefit of another (the beneficiary). The person who creates the trust is known as the grantor. Trusts can serve a wide range of purposes, including avoiding probate, protecting property, managing assets for minors, and planning for incapacity. One significant advantage of a trust is that it can function during the grantor’s lifetime and continue after the grantor’s death.

Unlike a will, which only takes effect after death and requires probate, many trusts become effective immediately upon creation. This can help streamline the asset transfer process and reduce court involvement. For individuals with complex family situations or multiple properties in Florida, a trust offers a greater degree of control and continuity. Working with a trust attorney can help ensure these advantages are realized efficiently and in compliance with state law.

Types of Trusts and Their Benefits

There are many types of trusts, but most fall into two categories: revocable and irrevocable. A revocable living trust allows the grantor to maintain control and make changes during their lifetime. It’s often used to avoid probate and simplify asset management. In contrast, an irrevocable trust usually cannot be changed once established, but it offers benefits such as asset protection and potential tax advantages.

Understanding the various types of trusts can help you select the most suitable approach for your financial objectives, family structure, and long-term planning needs. Below is a list of commonly used trusts and the key benefits they offer:

• Revocable Living Trust – Allows you to retain control during your lifetime and helps avoid probate upon death. It also simplifies asset management in the event of incapacity.
• Irrevocable Trust – Offers asset protection from creditors and may provide estate tax benefits. Once established, the terms are generally fixed.
• Special Needs Trust – Preserves eligibility for government benefits while providing financial support for a loved one with a disability.
• Testamentary Trust – Created through a will and becomes effective upon death. It enables long-term control over asset distribution, particularly for minor children.
• Charitable Trust – Enables donations to a charity while offering potential tax deductions and maintaining some control over donated assets.

At our West Palm Beach office, we frequently work with clients who wish to utilize trusts to manage their real estate, financial accounts, and personal property. For families caring for aging parents or loved ones with special needs, a trust can provide peace of mind and long-term financial support.

Who Needs a Trust?

Not everyone needs a trust, but many can benefit from one. If you own real estate, have significant financial assets, or wish to keep your estate matters private, a trust may be a worthwhile consideration. Parents of minor children, blended families, and individuals with concerns about probate delays in Florida often turn to trusts for added flexibility and control.

An estate planning attorney in Florida can help determine whether a trust fits your goals. At the Law Office of Petrovitch & Kutub, P.A., we evaluate your unique needs and offer straightforward options for protecting your assets and family.

We also support clients across Fort Lauderdale and Boca Raton who wish to incorporate trusts into their comprehensive estate plans. Whether it’s preserving wealth, ensuring a smooth transfer of property, or supporting future generations, our legal team builds strategies that align with your goals and Florida law.

How Do You Create a Trust in Florida?

Creating a valid trust in Florida requires more than just filling out a form. It involves identifying the grantor, trustee, beneficiaries, and the assets that will be placed into the trust. The trust document must also specify how and when those assets will be distributed.

In Florida, the trust must be signed by the grantor and properly executed. Then, assets need to be formally transferred into the trust, a process known as “funding the trust.” This may include changing property titles or updating account ownership.

Our firm provides personalized guidance throughout this process, ensuring that each step meets legal requirements and accurately reflects your intentions. Clients often visit our practice areas page to learn how trust planning fits into broader services, such as probate avoidance or Medicaid planning.

Legal Confidence Starts with a Trust

A trust offers control, protection, and privacy. Whether you’re planning for long-term care, securing your legacy, or avoiding court delays, the proper trust structure can support those goals. The Law Office of Petrovitch & Kutub assists clients throughout Florida, including West Palm Beach, in structuring and executing trusts with precision and expertise. Contact us today to schedule a consultation and begin building a future that reflects your values.