Many people in Florida are thinking about how they can best pass on their assets to future generations. Trusts are an excellent method to transfer wealth to children or other loved ones; they can be created to fill unique needs, and they allow assets to be transferred privately without going through the probate system. In addition, people begin to realize the tax advantages provided by trusts right away. However, many people worry about the potential consequences of informing their children from a very young age that a significant amount of money is being held in a trust fund. They may worry that children might not strive for success in school or a career.
When people create a trust, the trustee is ordinarily required to inform the beneficiary about its creation as well as its administration. Silent trusts allow people to create trusts while waiving this requirement, thus keeping the existence of the trust a secret. The trust will include a set period of silence whether it is a specific length of time or until the beneficiary reaches a specified age. In the meantime, the trust creator can reap the tax and estate planning benefits over the years while resting assured that he or she has provided for their loved ones.
Silent trusts can be a preferred option to incentive trusts, which is when specific life milestones or behavioral incentives are required to receive trust distributions. Because silent trusts simply do not inform the beneficiary of their existence, they can encourage positive behavior without creating a sense of manipulation.
When people consider how to leave a legacy for the next generation, they have a number of options that can help them to achieve their goals. An estate planning attorney may work with people to create the trust documents necessary and make choices that protect their assets for the future.