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Trust Planning

Estate Planning Attorneys Serving Clients Throughout the Houston Metro Area

Trusts are a fundamental estate planning tool that have many purposes. At its core, a trust is a legally defined three-part relationship between the grantor (the person creating the trust), the trustee (the person managing the trust), and the trust beneficiaries (those for whom the trust is intended to benefit). Trusts can be used to reduce estate taxes, shield assets from creditors, avoid the probate process. Trusts also allow grantors to exercise more significant control over their assets after they pass on. At McCulloch & Miller, PLLC, our Houston trust planning attorneys have over a half-century of collective experience advising clients and creating effective estate planning documents, providing them with invaluable peace of mind.

Trusts 101: Why is Everyone Trying to Sell Me a Trust?

Revocable and Irrevocable Trusts

There are many different types of trusts, each offering its own unique benefits. However, for the uninitiated, the topic of trusts can be overwhelming. Before you begin planning a trust, it is important to understand the types of trusts available in Texas and some of the common trust terminology.

Trusts generally come in two forms, revocable and irrevocable trusts. A revocable trust is one in which the grantor retains the ability to change the terms of the trust during their lifetime. Assets placed in a revocable trust generally pass directly to trust beneficiaries upon the grantor’s death, bypassing the need for probate. However, while revocable trusts are flexible, assets contained in a revocable trust are still subject to estate taxes and other creditors.

Irrevocable trusts are less flexible in that, once they are established, the grantor many times does not have the authority to amend the trust’s terms. Thus, these trusts can only be modified under certain conditions. While this lack of flexibility is a considerable drawback, the trade-off is that assets in an irrevocable trust are not counted when assessing estate taxes and are often beyond the reach of creditors.

Common Types of Trusts

In Texas, there are few types of common trusts used by estate planning lawyers. These include:

Testamentary Trusts – A testamentary trust, or pour-over trust, is created through a person’s last will and testament. Thus, testamentary trusts do not exist until the grantor passes away, at which point, designated assets will automatically transfer to the trust. Assets in a testamentary trust must first pass through probate before being distributed to trust beneficiaries. Testamentary trusts are often used to pass on assets to minor children.

Living Trusts – A living trust, or an inter vivos trust, is created through a trust instrument (rather than a will) during the grantor’s lifetime. Because of this, assets in a living trust do not pass through probate before being distributed to trust beneficiaries. Living trusts can be revocable or irrevocable.

Special Needs Trusts – Often, individuals with special needs rely on government benefits that require beneficiaries to meet strict asset limits. If someone receiving Medicaid or Social Security benefits inherits a large sum of money, house, or other assets, it may render them ineligible for benefits. A special needs trust, or supplemental needs trust, is a trust set up to provide for a loved one with special needs without jeopardizing their eligibility for critical needs-based benefits.

Spend-Thrift Trusts – Occasionally, individuals want to leave significant assets to a loved one, often a child, but worry about the beneficiary’s ability to responsibly manage a large sum of money. A spendthrift trust allows the grantor to name an independent trustee who oversees all distributions. This type of situational trust can also support passing on values and other goal-oriented principles that the grantor deems important.

Determining the types of trusts that suit your particular needs requires a detailed review of your familial and financial situation, as well as a thorough discussion of your wishes. A Houston trust planning lawyer can help you understand the various trust options and select those that fit your unique needs.

Contact an Experienced Trust and Estates Attorney Today

If you have questions about trusts or general questions about estate planning, contact the knowledgeable attorneys at McCulloch & Miller, PPLC. At McCulloch & Miller, we work closely with our clients to assess their needs, creating comprehensive estate planning strategies to protect wealth, eliminate unnecessary taxes, and provide our clients with peace of mind. We take as much time as necessary to listen to your needs before recommending any course of action and will never pressure you to make a decision. To learn more, and to schedule a consultation with one of our Houston trust planning lawyers, give McCulloch & Miller a call today at (713) 333-8900. You can also reach us through our online form.

Client Reviews
"In late February, 2020, I needed to file from out of state for successor Letters Testamentary in Harris County for my father's estate. The attorney I used, Ryan Cook, returned my call promptly, gave me the option of hourly or flat rate fee, explained what would be involved, then let his paralegal and other staff handle most of the contact with me. I worked with Crystal. She was very responsive and tech savvy. As the pandemic hit and communication everywhere was getting difficult and the probate court had limited access, these women continued to stay in touch and help me through the process, with us all working remotely. We were all experiencing a new way of being in the world and all three of them handled it with grace, humanity and efficiency." L.B.
"I would highly recommend this law firm because of their caring and professional staff. Mr. David Miller and Crystal Collins have gone above and beyond to help our family get all our elderly parents legal paperwork up to date. We are extremely appreciative for all they have done for us." A.B.
"I engaged the services of McCulloch & Miller to assist me with the difficult task of navigating Medicaid eligibility requirements for a close family member. I found them to be knowledgeable and thorough. Working with Darby was a pleasure. She took the worry and aggravation of dealing with a government entity off my shoulders. I highly recommend McCulloch and Miller for eldercare issues." B.S.
"We needed assistance with a Medicaid application and McCulloch & Miller were extremely helpful and expedited the paperwork promptly. We also greatly appreciated the professionalism, and caring manner in which Darby handled our case. If you need assistance, we highly recommend this firm!" P.M.