What is a Trust?
Trusts are a great tool for estate planning that can help avoid probate, simplify transfer of property upon death, and better effect your wishes should the unthinkable should happen to you.
Many average folks tend to skip the whole conversation about a trust because it is often thought of as a rich man’s game. However, a reasonably priced trust can be not only affordable for an average family, it may in fact be the best option.
Here are some things to consider:
1. Wills must be filed in probate court to be effective.
In Texas, the process for filing a probate is more streamlined than in some other states. However, even in Texas, probate costs can be thousands of dollars and still take months to complete. Meanwhile, your will and your property can be exposed to the public record.
2. A trust can operate in your incapacity.
While every good estate plan includes all powers of attorney to allow for the management of your property should something happen to you, property owned by a trust can be immediately managed by a successor trustee should something happen to you.
3. A trust can limit your gifts to protect your beneficiaries.
You love your children. You wish to leave them gifts that impact their lives for the better. However, most people would never wish to leave a gift of money to a child that would only empower them to destroy their lives.
When leaving gifts through a trust, it is possible to create trusts that put limitations on what the trustee can give to children in such cases. Gifts can also be protected from lawsuits, divorced spouses, and creditors of your beneficiaries.
4. A trust gives you more control on how money is distributed.
Whatever your wish for your loved ones in regards to your assets, a trust can be the most effective tool in allowing the money to be distributed in the time and fashion of your choosing.
- You may wish your children to use gifts you would leave them to pursue an education.
- You may wish them to use the gifts as a chance to explore the world and have experiences.
- You may not want them to have access to funds until they are 35.
- You may wish that they have immediate access to the money should something happen to you.
5. Trusts are the appropriate method of sophisticated planning.
You can do many things with your will, or other documents, including create trusts directly in a will.
“So why don’t I just do a will and then put trusts in there?”
The problem with the question is that it is really asking the more important question,
“Can I purchase a cheaper product and add things to it to make it work like the higher quality product?”
The answer to the question is that we can always craft a will to leave things to your family in whatever way you choose, but pricing for lawyers isn’t based on products, it’s based on complexity.
The pricing of a complex will plan that has all the language to compare to the methods used in a trust would end up costing the same as a trust, both in time for the attorney to draft it and the final cost to the client. This cost makes the will a less desirable option as it still comes with its inherent weakness of requiring your will to be probated. This is the main reason why most sophisticated plans involve a trust as the foundation of the plan.
The trust is a versatile and sophisticated tool that allows people the flexibility and power
to distribute property however you would like should the unthinkable happen.
You should contact a qualified attorney today to discuss these great tool as part of your plan. The Malolo Law Firm as always is ready and able to discuss this great option with people in the McKinney, Allen, Frisco, and surrounding areas!
If you have any questions regarding trusts and estate plans, call The Malolo Law Firm, PLLC,
in McKinney at (214) 620-2088. Protect your legacy for your loved ones and plan your way!
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- Posted by Charlie Malolo
- On August 15, 2016