Austin Trusts Lawyers Helping You Navigate Your Path To A Secure Legacy
Trusts are a cornerstone of a comprehensive estate plan for many families. They provide a means to manage assets and ensure they are distributed according to your overall estate plan.
The thought of setting up a trust can seem intimidating, but with the right legal guidance, it can become a pivotal part of planning your future. At Warren & Kazen Law, our trust attorneys bring over 25 years of legal experience to our practice.
Our approach is tailored to your unique needs because we truly care about your peace of mind. We are dedicated to securing your legacy and ensuring that your wishes are fulfilled.
Understanding Trusts
A trust is a legal entity that allows a third party, or trustee, to hold and manage assets on behalf of named beneficiaries for whom the trust is established. While wills and trusts are similar in some ways, trusts provide more flexibility to accomplish varied objectives. Trusts can offer various advantages such as privacy, control over your wealth, avoidance of the probate process and potentially even tax benefits.
With the right trust in place, you can rest assured that your assets are protected and will be handled according to your specific directions.
Types Of Trusts
Texas law and federal tax law recognize several types of trusts, each designed to serve different estate planning goals. Common trusts include:
- Revocable living trusts, which can be altered or revoked during your lifetime. They offer flexibility, probate avoidance, privacy and control over your assets.
- Irrevocable trusts can’t be modified or undone once established, but they may provide significant potential tax benefits and asset protection.
- Testamentary trusts are created as part of a will and take effect after death, guiding the distribution of assets.
- Special needs trusts are designed to benefit individuals with disabilities without affecting their eligibility for government assistance.
- Charitable trusts facilitate philanthropic goals while offering tax advantages.
Our lawyers can conduct a thorough review of your goals and situation to recommend trusts that will best suit your needs.
Do Trusts Protect Against Taxes In Texas?
Trusts can be structured to provide certain tax advantages, potentially minimizing estate taxes at the federal level. However, tax implications vary widely based on the type of trust and individual circumstances. Talk to our lawyers for more guidance.
Do Trusts Protect Against Probate In Texas?
Many trusts, when properly created and funded, can help your estate avoid the probate process. This advantage allows for a more private and efficient distribution of assets.
What Does It Mean To Fund A Trust?
Think of a trust as a secure vault where you can keep your valuables safely locked away. A trust functions similarly but for your assets instead of cash or jewels. However, creating a trust document is just the beginning. Now, you must fill the trust (fund it) with assets.
Funding a trust involves transferring the ownership of your assets to the trust itself. This transfer ensures that the trust, not you as an individual, holds the title to the included assets.
Assets commonly used to fund Texas trusts include:
- Real estate deeds
- Title transfers
- Luxury motor vehicles
- Business interests
- Financial accounts
- Life insurance policies
A pour-over will is like a safety net for your assets. It is a separate document or provision directing assets unintentionally left out of the trust to be “poured over” and transferred after your passing. While this will not prevent probate for those specific items, it ensures they ultimately reach your trust for efficient distribution.
Do I Need A Trust If I Have A Will?
Having a will is a great early step in securing your legacy. However, a will and a trust serve different purposes in your estate plan.
A will dictates how your assets will be distributed after you pass away and appoints an executor to manage your estate. Wills are essential for everyone, but they do not guard against probate – the lengthy and public process of ensuring estate documents are valid.
Unlike wills, trusts offer the promise of increased flexibility, allowing you to custom-tailor your entire plan. For example, you can use trusts to set conditions for distributions, leave certain assets to specific beneficiaries and address concerns for loved ones with special needs.
Ultimately, deciding whether you need a trust depends on your unique circumstances. As a guideline, those with complex estates, young children or specific asset distribution wishes can benefit enormously from a well-developed trust strategy. When you work with Warren & Kazen Law, we can guide you through your options and help you make informed decisions about your needs.
The Steps For Establishing A Trust In Texas
Once you’ve decided that a trust is right for your estate plan, what comes next? Below, we’ve outlined the basic steps to follow when establishing a trust.
Step one: Choose the type of trust based on your goals. Do you want to avoid probate? Do you have a family member with special needs? Want to reduce inheritance tax burdens on your intended heirs? There are dozens of commonly used trusts based on your needs.
Step two: Decide on revocability. A revocable living trust gives you significant control over the trust and its assets while you are alive and serving as the trustee. An irrevocable trust offers stronger asset protection but with less flexibility and control.
Step three: Attach beneficiaries and a trustee. The trust beneficiaries are like heirs named in the will. Assets will be distributed to them in a time and manner specified in the trust. You’ll also need to name an initial trustee. If you’re creating a revocable living trust, you will likely be the trustee and will name someone to take over as trustee when you pass away or become incapacitated. With an irrevocable trust, however, you may decide to give that responsibility to someone else.
Step four: Decide how the trust will be funded. As mentioned above, a trust is little more than a plan until it contains assets. You’ll need to decide which assets to transfer into the trust and in what amount.
Step five: Ensure all documents and paperwork are in order. As with estate planning, there are do-it-yourself options available that could initially save you money. However, the costs of making a mistake would likely far outweigh whatever you initially saved. A trust is a legal entity responsible for safeguarding and eventually distributing your assets. It is important to work with a knowledgeable attorney who can ensure the paperwork is complete, accurate, unambiguous and legally sound.
The trust attorneys at our firm offer more than 25 years of experience in this area of law. They are ready to guide you through all of the steps outlined above.
Take The First Step Toward Exploring A Trust That’s Right For You
At Warren & Kazen Law, we understand the importance of careful estate planning. As your wills and trust attorneys, we’re here to guide you through trust laws in Texas with clarity and compassion. Contact us today at 512-982-1141 to create a plan tailored to your life and loved ones.