Our comprehensive estate planning practice includes trusts. Unlike a will, assets that have been transferred to a trust do not have to go through probate. This can save you both time and money. It may even help you to avoid estate litigation, where one or more individuals with legal standing file a challenge to the terms of a will or trust document.
A revocable family living trust can help you preserve your financial values while retaining complete flexibility. The structure of a living trust makes this retention of control possible. Typically, you name yourself as both the trustee and beneficiary. Assets are retitled in the name of the trust, but you may freely transfer or withdraw them from the principal of the trust, or even eliminate the trust altogether.
Since there is no functional change in ownership, a revocable family living trust does not offer tax benefits during your lifetime. You do not need to obtain a separate tax ID number or file tax returns for it. Upon your passing, however, the trust becomes irrevocable. Your successor trustee assumes control and distributes the assets to the successor beneficiaries, bypassing probate.
Irrevocable trusts, in contrast, have immediate tax effects because they remove assets from your estate. For a trust to qualify as irrevocable, you must not retain any control over its disposition. This requires an independent trustee to administer the irrevocable trust.
We have helped parents set up irrevocable trusts for their disabled children, called a supplemental needs trust. This is just one of many possible functions that this type of trust can fulfill.
You can fund a trust with almost any kind of asset. You can name a trust as the beneficiary of a bank account, provided that your financial institution allows this. However, you must specifically transfer assets to your trust or it will remain empty. We can work with you to ensure that you do not forget this important step. We may also recommend a pour-over will, which states that any overlooked assets should be transferred to your trust after they have gone through probate.
To learn more, call 210-405-4063 or contact us online to schedule a consultation at our San Antonio office.