HOUSTON TRUSTS LAWYER

Creating an effective estate plan in Houston used to mean drafting a will. However, modern estate plan options can help to transfer property more easily. This results in the ability to transfer property at any time and provides protection against taxation and help to simplify the probate process. Creating a trust can serve each of these purposes.

A trust lawyer in Houston may be able to help you.

A dedicated trust attorney can work with you to understand your estate planning goals. They can help you determine whether a trust is right for you. The trusts attorney will craft legal trust documents that carry full legal effect. Contact Your Legacy Legal Care in Houston today.

WHAT IS A TRUST?

A trust is a way to transfer property to another party. These parties can be individuals, businesses, or even charitable organizations.

To create a trust, state law under Texas Trust Code § 112.001 provides three options. These are:

A property owner’s declaration that the hold the property as trustee for another
A property owner’s transfer of property to another person with that person named as a trustee
A property owner’s transfer upon death of property to another as a trustee

In simpler terms, a person creates a trust when they transfer property to another to hold. A Houston trusts lawyer can help you to better understand the basic concept of a trust.

HOW DO TRUSTS FUNCTION?

The purpose of any trust is to transfer property from one person to another. An essential player in this is the trustee.

A trustee takes temporary control over the property until the designated time arrives. At this time, that trustee must give the property to the beneficiary or beneficiaries. This time may be a specific date in the future or the time of the trust maker’s death.

Trusts may serve many purposes. Common reasons to create a trust include:

Preventing beneficiaries from being disinherited (this often occurs with second marriages and will-based planning)
Owning real property in more than one state
Passing the estate to more than one generation
Providing for aging parents
Providing funds to a charity
Holding property for a minor heir until that person becomes an adult
Distributing funds at a set rate for a designated period
Asset protection for potential creditors or long term care

A skilled trusts attorney in Houston could help to identify your needs and craft documents that further your goals.

WHAT ADVANTAGES COME WITH A TRUST?

Many people are unaware of the advantages of using a trust. One advantage to creating a trust is to avoid probate. Property that moves as the result of a will must flow through the state’s probate process.

The probate process can be both lengthy and costly. Interested parties may dispute the authenticity of the will. Once property is placed into a trust, it is no longer part of a person’s estate. As such, it is not subject to scrutiny in probate.

Another advantage is avoiding estate tax. Once the original property owner gifts their property into a trust, they no longer control the property. Because of this, the trust maker does not need to pay taxes on the property. Similarly, beneficiaries will not need to pay a gift tax when they receive the property.

A third advantage is preventing accidently disinheriting children when you have second marriages and his and her children.

HOW VARIOUS TRUSTS PROTECT YOU, YOUR FAMILY, AND YOUR ACCUMULATED ASSETS

Different types of trusts involve different complexities. You need to have a skilled trust attorney working with you as you plan your estate. Your Legacy Legal Care Houston trust lawyers have experience handling all the following types of trusts:

Revocable Trusts

Revocable Living Trusts can be altered or revoked throughout your lifetime. Property in revocable trusts remain a part of your estate and can therefore be taxed if you have a federal taxable estate.

Upon death, the revocable trust will become irrevocable. The property held in the trust will be passed on to your beneficiaries.

Two major advantages of revocable trusts are that [1] to avoid probate and [2] to preserve your financial privacy, unlike wills, they are not public documents. At the time of your death, a revocable trust becomes irrevocable.

Irrevocable Trusts

These cannot be changed or revoked once they have been created. Examples of irrevocable trusts are trusts for minors, insurance trusts, and charitable trusts. Though they are permanent and don’t give you the flexibility of revocable trusts, they are advantageous in terms of taxation.

Trusts for Minors

Trusts for Minors are established to protect a minor child until he or she reaches adulthood. While some minors trusts provide specific benefits to the minor during childhood, others designate that the funds are only to be distributed when the minor reaches adulthood.

Some trusts for minors have specific rules. These rules dictate that the minor can only access the money under certain conditions. For example, they may need to reach a certain age or finish college.

Special Needs Trusts

Special needs trusts (SNTs) are created to protect individuals who have a disability in a way that prevents them from consistently managing their own finances. The beneficiary may be cognitively or psychiatrically disabled to the point that he or she is incapable of using money in a reasonable way.

The trustee of a special needs trust distributes money gradually. This ensures that the vulnerable individual will have enough money for the rest of his or her life. The trustee also manages the funds so that the person with a disability does not “own” the funds. This enables the individual to still be eligible to receive government benefits like Medicaid.

Spendthrift Trusts

Spendthrift Trusts protect irresponsible beneficiaries from their own potential bad choices. Individuals who are addicted to alcohol, drugs, gambling, or wild shopping sprees need someone else (the trustee) to keep them from having access to a large sum of money. The trustee dispenses assets in reasonable amounts for rational purchases. In other words, the trustee’s sound judgment substitutes for the spendthrift’s questionable one.

Testamentary Trusts

Testamentary Trusts are designed to go into effect after you pass away. These trusts can hold assets from during your lifetime, as well as assets that are only dispensed when you die. This would include items such as life insurance proceeds or funds from a wrongful death settlement. However, you must probate to set up these trusts.

Married A-B Trusts

Also known as bypass trusts, these trusts allow spouses to combine their exemptions for use by the surviving spouse. When one spouse dies, instead of his or her assets being transferred to the other spouse, those assets are transferred to an irrevocable trust.

It may even be possible for the surviving spouse to receive income generated by this trust for living expenses. This is helpful when a very large estate is involved, which would be vulnerable to a heavy estate tax after the death of the second spouse.

Qualified Terminable Interest Property (QTIP) Trusts

These trusts qualify spouses for an unlimited marital deduction. This means that no estate taxes will be paid by the surviving spouse. In addition, a QTIP trust also permits successor beneficiaries to receive untaxed assets after the surviving spouse dies.

Qualified Personal Residence Trusts (QPRTs)

Qualified Personal Residence Trusts (QPRTs) permit you to give your beneficiary your house as a gift. This enables the receiver to pay a low gift tax rate, while you continue to use your home during your lifetime. With a QPRT, estate tax is also avoided.

Charitable trusts

These trusts are irrevocable. In Texas, a charitable trust receives favorable federal tax treatment. Texans have the added advantage of not having to pay state income tax.

It is possible for the trust attorneys at Your Legacy Legal Care to set up your charitable trust as a remainder trust. This means that you and your family retain the income generated by the amount given to charity. In some cases, we can arrange for the surviving spouse to receive remainder benefits when the first spouse dies.

Crummey Trusts

A Crummey trust makes it possible for you to give gifts while taking advantage of the gift tax exclusion. You also retain the ability to limit the recipients access to the funds.

Pet Trusts

Pet trusts allow you to ensure that your beloved pet will be well cared for during its lifetime. Even if you predecease your pet or become too incapacitated to tend to it yourself.

CONTACT A HOUSTON TRUSTS ATTORNEY TODAY

Trusts offer a modern solution to the problem of distributing assets. Unlike traditional wills, trusts allow for an easier way to transfer property. At the same time, they allow beneficiaries to avoid the probate process.

Contact a Houston trusts lawyer today. An attorney specializing in trusts can talk with you concerning your estate planning needs. They will help you determine whether a trust is the right option for you. This includes identifying your goals and crafting the estate planning documents necessary to make those goals a reality.

Providing for the future of one’s family and heirs is not just a goal for the present. People also need to consider what will happen after they pass away. This process is called estate planning.

A Houston trusts and estate planning attorney could help during every stage of this process.

LET A HOUSTON TRUSTS AND ESTATES ATTORNEY HELP YOU

Forming a comprehensive estate plan does not need to be a lengthy or intimidating process. From identifying your assets to beneficiary designations to crafting legal documents, Your Legacy Legal Care are experts can help you with setting up a trust in Houston.

A diligent attorney is prepared to make arguments in court concerning the validity of testamentary documents. This includes arguing for why a will is valid or arguing that a document should carry no legal effect. Schedule a consultation with a Houston trust and estates lawyer to discuss your goals.