Establishing Trusts in Texas
If done research concerning comprehensive estate planning, you’ve probably stumbled across the topic of trusts. Like a will, a trust is a legal document in which a trustee will distribute assets among your designated beneficiaries.
You can establish several types of trusts as part of your estate plan. Contact an experienced attorney from Anderson Estate Planning in McKinney, Texas, at (469) 207-1529 to learn more about your options and receive professional guidance.
Common Types of Trusts
Estate planning attorneys commonly recommend trusts to help clients avoid probate courts and judges in all states where they have assets. This provides a more efficient distribution of your assets following your death. It also will allow you to protect the future of a surviving spouse or any minor beneficiaries.
First, you should determine the kind of trust best suits your needs. Then you must fund your trust by transferring assets to it and repositioning applicable beneficiary designations.
A Living Trust
A living trust holds your assets during your lifetime and it can end or continue to exist upon your death, depending on its terms. As the grantor, you can transfer ownership of your real estate, vehicles, investments, and other types of assets into the living trust.
There are two kinds of living trusts:
- Revocable Trust: You can amend the terms of a revocable trust. Amendments may include designating a new trustee, designating different beneficiaries or adding more of them, and changing the percentages of trust assets certain beneficiaries will inherit. You also can move assets in and out of the trust or terminate it at any time.
- Irrevocable Trust: As the name suggests, it is more difficult to amend or terminate an irrevocable trust. It also is harder to remove assets from the trust. Typically, such actions require orders from a judge. While this kind of living trust requires careful planning, it provides potential relief from estate taxes because the value of assets in irrevocable trusts may be excluded from your estate.
Other Common Types of Trusts
While living trusts are the most common, other types of trusts include:
- Testamentary Trust: You can create a testamentary trust under the terms of your will. Sometimes called a “springing trust,” this kind of trust exists only after your death. It is irrevocable from the moment it is formed. However, you can alter the terms of the trust during your lifetime.
- Charitable Trust: With a charitable trust, you can designate one or more of your favorite non-profit organizations as beneficiaries. These trusts also provide some tax benefits.
- Special Needs Trust: This type of trust allows you to provide an inheritance to assist a loved one with special needs and they still can obtain or maintain any needs-based government benefits.
Contact an Estate Planning Attorney in Greater Dallas-Fort Worth, Texas, Today
Our attorneys at Anderson Estate Planning have many years of experience helping clients establish trusts suitable for their unique desires and family dynamics, and we dedicate ourselves to providing personalized, compassionate legal assistance for every client we serve.
Contact us at Anderson Estate Planning in McKinney, Texas, today at (469) 207-1529 to schedule a consultation and plan for your future.