Common Questions About Trusts

Does Creating a Trust Affect My Bank Account Beneficiaries?

Creating a trust does not change the beneficiary designations you have on your bank accounts, life insurance policies, or retirement accounts. Those direct beneficiary designations remain in effect and take precedence over your trust. If you’ve named someone as a beneficiary on these accounts, they will receive those assets directly, regardless of what your trust states.

Is It Easier to Name One Child as a Beneficiary and Rely on Them to Share?

You might think it’s simpler to name one child as the sole beneficiary and trust them to share the inheritance with their siblings. While this approach can reduce paperwork, it can lead to complications. Once that child receives the funds, they have full legal control over the assets. Even if they intend to share, this could create gift tax issues since the transfer would no longer be considered your gift but theirs.

Another concern arises if that child passes away before distributing the assets. In this case, the inheritance could become part of their estate, complicating matters further and potentially leaving siblings without their intended share.

The safest approach is to name all your children as beneficiaries and clearly outline how you wish for the assets to be divided. This avoids confusion and ensures that everyone knows their share.

How Should I Identify Beneficiaries in My Trust?

The best way to clarify your intentions is to specifically name each beneficiary in your trust. By doing so, you provide a clear path for asset distribution and can specify what happens to the share of anyone who may not survive you. This reduces the chances of disputes and ensures your wishes are followed as you intended.

Protect Your Legacy with Expert Guidance

Managing trusts and estates can be complex, but having a clear plan can make all the difference. At The Mendez Law Firm, we specialize in Estate Planning and can guide you through the process of creating a Family Estate Plan. Call us at (407) 380-7724 or Email Us TODAY at mail@themendezlawfirm.com. We’ll schedule your FREE, No Obligation, No Cost office conference or Virtual Zoom conference to discuss your Family Estate Plan and review other probate avoidance and asset protection options that may benefit you and your family. If you are looking for a Florida estate planning attorney, we are here in the Greater Orlando area to help with all your Estate Planning and Asset Protection needs.