A last will and testament is an essential component of any estate plan. And for many people, the same can be said of a well-crafted trust.
Trusts were once considered to be only for the wealthy, but that's no longer the case. You don't need to be rich to benefit by establishing a trust – here are several reasons why you may want to consider this powerful estate planning tool.
When you set up a trust, you can appoint anyone to be in charge of managing trust property. Make yourself the trustee, and you'll retain control over the property while you're alive – you can sell, mortgage or give it away or put ownership of the property back in your name at any time.
While a last will and testament specifies who receives your assets after your death, the estate planning tool doesn't control how the assets are used. Establish a trust, and you can tie the distribution of funds to certain acts, such as the completion of college or a rehabilitation program. You can also ensure that the funds go toward a specific purpose.
What if you become too ill to manage your own financial affairs? If you make a trust part of your estate plan, your loved ones won't have to worry about how to handle your assets or how to find funds to support your needs. In the event of your incapacity, your chosen trustee will step in and handle everything according to your wishes.
The Texas probate process doesn't always move quickly, and navigating probate matters can be difficult. Probate can also be expensive, as the executor or administrator is paid a percentage of the total estate value. Put your assets into a trust, and they can pass to your beneficiaries – without the need for probate.
When a will goes through probate in Texas, the information becomes a matter of public record and anyone can see the details of your estate plan. With a trust, your loved ones will enjoy a layer of privacy after your death – and you can also rely on a trust to obscure certain information, like the ownership of property, during your life.
Is one of your loved ones disabled or mentally ill? Leaving them cash could disqualify them from receiving Medicaid or Supplemental Security Income (SSI). With the right type of trust, you can provide them with financial support after your death – and the money they receive won't affect their eligibility for government benefits.
An experienced estate planning professional – like the attorneys at Schultz and Kellar -- can help you determine if a trust is worthy of consideration and, if so, how to structure the trust to achieve your specific goals. For a free, no-obligation consultation to get guidance on trusts and advice on your Texas estate planning, contact our Southlake office today.