A trust is a great estate planning tool for anyone who wants to avoid the costs associated with probate, decrease the amount of taxes paid at death and provide limitations on their young children’s ability to access money left to them. An attorney experienced in estate planning at Law Offices of Jo Bess Jackson, P.C. in Dallas, Texas, can explain trusts and how they can be a viable component of your estate plan.
A trust is a legal property interest held by one person, called the trustee, for the benefit of another person, called the beneficiary. The person establishing the trust is called the grantor. The grantor chooses whom he or she wants to be the trustee. The trustee should be someone the grantor believes will carry out the purpose of the trust faithfully. The trustee cannot also be a beneficiary of the trust.
A trust can be revocable or irrevocable. A revocable trust can be changed or terminated by the grantor at any time, for any reason. An irrevocable trust, however, cannot be changed or terminated for any reason by the grantor at any time.
A trust also can be a living trust or a testamentary trust. A living trust, also known as an inter vivos trust, is created while you are alive and is not part of the probate estate, thus helping you avoid probate and the costs associated with it. A testamentary trust is created through a will, and as a consequence, generally must go through the probate process.
There are many types of trusts that can be used to meet specific needs or purposes, including:
- Charitable trusts — trusts created to benefit a specific charity or the public
- Discretionary trusts — trustees are given authority to determine when and how much trust income or property should go to the beneficiaries
- Honorary trusts — trusts to honor or remember deceased persons or to provide for the care of pets, animals or other property
- Insurance trusts — trusts that contain insurance policies and their proceeds
- Spendthrift trusts — trusts that prevent beneficiaries from assigning their interests in the trust to others and prevent creditors from attaching their interests to trust assets (for example, if the beneficiary owes money to a creditor, the creditor cannot go after the trust assets to satisfy the debt)
- Supplemental needs trusts — trusts crafted to provide supplemental income for a disabled person in a way so as not to jeopardize the receipt of government benefits
- Support trusts — trustees are given discretion to pay as much as necessary for the support of the beneficiaries
Trusts come in a variety of forms. Whether you are looking to bypass probate, donate to your favorite charity or provide care for a disabled adult child, an experienced estate planning attorney can help you choose the appropriate trust document for your situation. If you have questions about trusts or estate planning in general, contact an experienced estate planning attorney at Law Offices of Jo Bess Jackson, P.C. in Dallas, Texas, today.
DISCLAIMER: This site and any information contained herein are intended for informational purposes only and should not be construed as legal advice. Seek competent legal counsel for advice on any legal matter.