After you pass, trusts save your family money, time, and paperwork.
If something happened to you, do you know who would inherit your estate? It’s never too early to prepare solid estate plans that will withstand the test of time or any legal challenge.
Creating a trust is a secure, fiscally responsible way to manage your property and assets and make sure they are distributed after your death according to your wishes.
Why Establish a Trust?
While there are many reasons to establish a trust, the most popular objectives include:
- To manage and control spending and investments
- To avoid probate and the fees associated
- To set aside funds to support your family after passing
- To manage assets that are not easily divisible such as vacation homes, pets, and recreational vehicles
- To manage business assets for planned business succession
- To provide structured income to a surviving spouse (also protects trust assets for descendants if the spouse remarries)
- To reduce income taxes from your estate
Without a trust, your assets would have to go through the probate process before they can be distributed. This can make the process far more time-consuming and expensive for your surviving loved ones.
Types of Trusts
There are many different types of trusts, but the three most common that we deal with are revocable, irrevocable, and contingent trusts:
Revocable trusts allow the trustor (or the person who created the trust) to revoke or amend them at any time. They are effective to avoid probate if that is the trustor’s intent. They are also very flexible and can be funded immediately or at the trustor’s death. Revocable trusts can be used to appoint someone to manage the individual’s affairs if they later become incapacitated. They can also be used if the trustor owns out-of-state property, in order to avoid an ancillary probate.
Irrevocable trusts are similar, but can’t be revoked or generally amended. The only person who can make and approve changes once it’s been created is a beneficiary. Once ownership of assets is transferred into the trust, you no longer have control over those assets.
Contingent trusts are included in most wills in case a minor ends up inheriting assets. This puts a trustee in charge of handling the minor’s inheritance until he or she reaches a specified age.
Correcting Errors in a Trust
Because there is a wide variety of trusts, there is also a wide variety of situations that can involve trust issues. The most common types of issues with trusts are:
Selecting the Wrong Type of Trust
There are many different types of trusts, and whichever type you choose should line up with your financial planning goals. You may need a trust that provides more protection than a living trust if you have Medicare, for example.
Forgetting a Spouse
You must decide if you want your spouse to have the ability to change the distribution of your assets. This can be complicated when figuring in multiple marriages with children, so considering your spouse’s actions is an important step in your estate planning.
Not Titling Your Assets
Having the correct documentation for your trust is only one part of the process. If you do not title all your assets in the name of the trust you have created, they will have to go through probate.
Poorly Selecting Your Trustee
Your trustee should be someone you believe can manage your estate responsibly and in line with your wishes. Choosing the wrong person for this job may lead to your assets not being handled or passed down properly.
Picking the right law firm to help draft your trust can make all the difference and help you avoid common mistakes like these. You need seasoned professionals who are committed to properly preparing or editing your trust.
Contact a qualified trust attorney in Fort Worth.
When you need extraordinary legal representation from experienced trust attorneys, contact Lovelace Law, P.C. at 817-953-9656 to set up a free consultation with one of our attorneys.