Too Many Family Trusts: have you tried merging them?

Not sure what to do with a bunch of Palm Beach trusts….. why not merge them under the Florida Trust Code?

Sick of All the Legal Mumbo Jumbo With Palm Beach Trusts?

• A mom or a dad will have a Florida revocable trust, also called a living trust
• When the first one of your parents pass, there may be two subtrusts created from the Palm Beach revocable living trust
• You may have a Marital Trust and a Family Trust or Credit Shelter Trust
• Mom or Dad may have created inter vivos trusts for your benefit or for the benefit of family members
• Wait… I’m not done yet

Family Trusts and Powers of Appointment

• What if mom or dad was a beneficiary of a trust created by THEIR mom or dad?
• Mom or dad might have a power of appointment –the power to give, or not give, away, a prior trust  ….. that might be given away in further trust !
• Or…..if mom or dad did not exercise their power of appointment, the trust created by their MOM or dad may keep the money in trust
• Finally, a lot of estate planning clients like the idea of keeping the wealth in one big family trust….that’s right —-retired executives in Jupiter with lots of stock options to Boca Raton Billionaires may have created a “mega” family trust

So…what do you do?   It may make sense to merge one or more of them if the terms are similar.  But be careful:  you don’t want to run afoul of any income tax or gift tax rules.  Make sure that you speak with the trustee, a good trust lawyer and a good gift tax and income tax lawyer.