What is an irrevocable trust?
An irrevocable trust in Florida disability planning law is an arrangement in which a grantor (the person making the trust) transfers ownership of their assets to a trustee (a legal entity acting on behalf of the grantor). The trustee then manages the assets for the benefit of another person, known as the beneficiary. The grantor cannot change or revoke the trust, hence the name irrevocable trust. The most common reason for setting up an irrevocable trust in Florida is to protect assets for the benefit of disabled beneficiaries who are receiving public benefits such as Supplemental Security Income (SSI) and Medicaid. This is because these public benefits often have limits on how much the beneficiary can possess to be eligible. By transferring assets into an irrevocable trust, the grantor can protect the assets from being counted toward the public benefits’ income and resource limits. Another reason to set up an irrevocable trust is to protect assets from creditors, lawsuits, and other liabilities. By transferring assets to a trust, the grantor removes their ownership of those assets, making them immune from any debt or liability. Finally, an irrevocable trust is also often used to avoid probate. Probate is the process of validating a will or settling an estate. By transferring assets into a trust, probate is avoided because the trustee will manage the trust after the grantor passes away, rather than the courts. Overall, an irrevocable trust is a powerful tool in Florida disability planning law that allows individuals to protect their assets, avoid probate court, and maintain eligibility for public benefits.
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