Types of Trusts
Trusts are versatile estate planning instruments that have a variety of uses. An estate planning attorney can tailor the terms of a trust to accomplish a wide range of goals. At McCulloch & Miller, PLLC, our experienced team of Houston trust and estate lawyers have decades of experience creating trusts and other important documents on behalf of clients from all walks of life. We take as much time as necessary to fully understand your needs, ensuring the final product we deliver to you is exactly what you are looking for.What Are the Most Common Trust Types of Trusts?
While trusts can be very complex, at their most basic level, a trust is a legally defined relationship between three parties. The grantor, or settlor, establishes the trust. The trustee manages trust assets. And the beneficiaries are the ones for whom the settlor creates the trust.
Trusts come in many forms. Trusts can be an inter vivos trust, trusts that are made during someone’s lifetime, or testamentary trusts, trusts that are created at the time of someone’s death (usually through their will). They can also be revocable or irrevocable. Some trusts, such as revocable living trusts, are flexible and offer great options for management of assets and probate avoidance, but they offer fewer benefits when it comes to asset protection and reducing estate taxes. Irrevocable trusts, on the other hand, provide robust protection and remove assets from a taxable estate but offer inflexible terms. Depending on your specific situation and your estate planning goals, an estate planning lawyer may recommend one or more of any number of trusts. Those trusts could include charitable trusts, pet trusts, gun trusts, supplemental needs trusts, or any number of other types of trust, each one serving a unique and specific trusts. Below are some of the most common trusts that an estate plan might use.Probate-Avoidance Trust
For those who are less concerned with asset protection yet want to spare their loved ones from going through the probate process, a living trust is a good option. A living trust is one that you create during your lifetime and allows you to determine where your assets will go after you die. By placing assets in a living trust, they fall outside the scope of the probate process and instead transfer directly to the intended beneficiaries. Additionally, these trusts can be designed to provide asset protection or spendthrift provisions to ensure that your legacy stays with your intended beneficiaries and doesn’t fall into the hands of creditors or other unintended parties.Asset Protection Trust
For Houston business owners and professionals, exposure to legal liability is a real concern. A single lawsuit can essentially wipe out years of hard work and careful planning. These individuals can place excess cash, property, and other assets in an asset protection trust to shield them from creditors, including those attempting to collect on civil judgments. Asset protection trusts can also protect assets in the event of divorce or unexpected death. However, asset protection trusts are less flexible than other types of trusts, requiring you and your attorney to carefully consider your future needs and design a trust that accomplishes each of your goals.Miller Trust
Given the rising costs of long-term care in Texas, public benefits planning has become a top primary estate planning goal for many as they approach retirement or suffer from medical setbacks. However, certain public benefits impose strict income limits, preventing many from qualifying for benefits. A Miller trust can help you to ensure public benefits eligibility even if you don’t currently meet the income limits.Supplemental Needs Trust
Individuals with special needs often receive public benefits such as Social Security and Medicaid benefits. These benefits help offset some of the additional costs that people experiencing disability incur throughout their day-to-day life. However, an individual’s benefits eligibility is jeopardized if they come into a large sum of money, such as an inheritance. A supplemental needs trust allows parents or other loved ones to set aside money that can be used by a beneficiary to cover their supplemental expenses while still maintaining eligibility for public benefits.
These are just a few types of trusts available in a Houston estate plan. To learn more about which trust may suit your needs best, contact a trust and estate lawyer.Schedule a Free Consultation with a Houston, TX Trust Planning Attorney at McCulloch & Miller
At McCulloch & Miller, PLLC, we believe that estate planning does not need to be a complicated process. If you are interested in learning more about the various types of trusts in Texas or have general questions about the estate planning process, we are here to help. Our Houston trust and estate lawyers have more than a half-century of experience helping individuals, families and business owners create effective, comprehensive estate plans that are custom-tailored to their unique needs. We also assist trustees in the trust administration process. To learn more, and to schedule a free consultation today, call (713) 333-8900. You can also connect with us through our online form.