It is a common myth that creating a trust within an estate plan is only for the wealthy. However, trusts provide many benefits regarding the ability of a person to distribute their assets and property. Many types of trusts exist, and it is important to understand which one might be right for your specific circumstance. These legal instruments can serve many purposes and provide advantages involving your estate, financial planning, taxes, and future healthcare and well-being. Additionally, trusts can protect your estate and privacy, plan asset distribution, and protect beneficiaries for years to come. Schedule a consultation with a seasoned estate planning lawyer at The Law Office of Jason Carr at 214-800-2366 to learn more about the benefits of a trust, and if this estate planning document would be right for your situation.
Estate Planning Trusts Provide Flexibility and Privacy
A trust is a legal contract and entity that allows people and organizations to hold another person’s assets. Trust assets can include cash, digital funds, investments, real estate, and business interests. Everyone, not just the rich, can establish a trust, and they often provide more flexibility and privacy than a Last Will and Testament in certain circumstances.
The primary reason wealthy families use trusts is that they are practical tools to help avoid many legal challenges from occurring during the transfer of assets. Trusts also eliminate the requirement to go through the probate process. In many cases, a trust can be a useful tool to fulfill the grantor’s final wishes and protect their heirs and legacy.
Understanding the Benefits of a Trust
Trusts allow a person (grantor) to pass their assets on to beneficiaries of their choice. The grantor has many options, including when the funds and other assets will transfer. Other advantages of a trust include the following:
- Trusts allow beneficiaries to skip the time-consuming and often costly probate process.
- A trust can allow a person to make determinations regarding the timing of asset distributions.
- A trust can help ensure the smooth transfer of business interests and real estate.
- Trusts are legal throughout the United States and in some cases, can allow for modifications once they are executed.
- Living trusts allow the creator to make crucial arrangements about their future, including what will happen if they become incapable of managing their personal affairs.
- An effective trust helps protect the estate from challenges and lawsuits.
- There are specific types of trusts that can be created, including special needs trusts, pet trusts, and gun trusts.
The creation of a trust allows a person to specifically identify how they want their assets to be distributed upon their death or in the event of their incapacitation.
Drafting and properly executing a trust involves appropriately transferring assets and property into the name of the trust. The steps to establish a trust often include the following:
- Make a determination regarding the exact assets that should be held within the trust
- Determine what type of trust should be created (i.e. living trust, revocable trust, irrevocable trust, gun trust, special needs trust, pet trust, etc.)
- Execute the trust properly so that the estate planning documents are legally valid
- Transfer ownership of the assets to the trust.
- The executor of the trust will follow the specifications detailed in the trust that follow the grantor’s wishes.
Trusts can be an important part of estate planning, and can become a valuable tools for wealth and asset management. These legal documents can even work to minimize taxes, safeguard assets, and help ensure the safe transfer of assets to named beneficiaries.
Specific Types of Trusts
There are many different types of trusts that can be created to address specific estate planning needs. Some of the following are common types of trusts created within a comprehensive estate plan.
- Special Needs Trusts: Special needs trusts allow a person to ensure that their family member receives financial support in order to obtain the care they need for medical support following a caretaker’s death. These trusts allow a person with special needs to still receive governmental benefits, and provides asset protection for their future.
- Pet Trusts: Many people want to take care of their family pet after they pass away. A pet trust allows a person to create a specific designation of assets to ensure that their pet is taken care of after their passing.
- Gun Trusts: There are very specific laws related to the transfer of firearms in the United States. A gun trust allows the transfer of these firearms legally after a person’s passing.
There are several other types of categories of trusts which include revocable and irrevocable trusts, and visiting with an experienced estate planning attorney can help ensure that you understand all of your legal options when making a decision regarding which estate planning documents will ensure your legal and financial rights remain protected.
Consider Visiting With an Experienced Estate Planning Attorney in Texas Today
Whether a trust is appropriate for planning your estate depends on your unique circumstances, including your financial situation, assets, and future desires and goals. Call the experienced Texas estate planning attorneys at the Law Office of Jason Carr at 214-800-2366 to speak with a compassionate estate planning lawyer about whether or not a trust would be right for your specific situation.