What is a Trust?

A trust is, in essence, a contract. The parties to the agreement are the grantors/settlors (the people setting up the trust), the trustees (the people managing the trust), and the beneficiaries (the people who receive income or other benefits from the trust).

What Benefits Does a Trust Offer? Are There Disadvantages?

One of the benefits of a trust is that it can be used as a tool to avoid probate. If all of a person’s assets are included in a trust, there is nothing that must be distributed through that person’s will. Therefore, the will does not have to go through the probate court system for the property to be distributed. There are many different kinds of trusts and each have their own benefits. You can discuss the different types of trusts with Trust Attorneys in Austin, TX. The only potential disadvantage of trust is that it costs more to set it up than just to set up a will. However, it is less expensive to the family overall if it avoids the cost of probate in the future. For most estates, setting up a living trust is less expensive that it would cost to probate a will.

What Components Make Up an Effective Trust?

It depends on what type of trust we are drafting. A revocable living trust avoids probate, but does not give any asset protection to the settlors while living. An irrevocable living trust does provide asset protection to the settlors while living, and it can be designed to pay the settlors income from the trust or not. There are also special purpose trusts that can be used for family members with special needs or for particular property, such as guns or rent houses.

Can I Have More Than One Trust?

Yes. Many of our clients are gun enthusiasts with a special purpose gun trust. A gun trust is helpful if you have a significant gun collection or if you are interested in firearms, such as short-barreled rifles or suppressors, governed by the National Firearms Act (NFA). They may also have a system of trusts that work together such as a family trust and individual beneficiary trusts. Experienced Austin Trust Lawyers know exactly how these different kinds of trusts work.

What Would You Say to Someone Who is Afraid of Losing Control of Their Assets if They Don’t Own Them Anymore?

We have the same concern. That is why we have several options available so that you can choose the level of control you want and still have the advantages of holding the property in trust. Talk to the Trust Administration Attorney in Texas at our office by calling (512) 288-3200.

Does a Trust Always Have Assets in It?

Every trust is created with some amount of assets. In some cases, it is simply a small amount of money used to initially fund the trust. After the initial funding, then other property can be purchased by the trust or transferred to the trust. The trust agreement will have instructions on when it can terminate, such as when there is no longer enough funds in the trust to make it economically feasible.

Are Assets Held in a Trust Protected from Creditors?

We design trusts to meet the needs of our clients. Some clients want immediate asset protection. But to have asset protection during the settlor’s lifetime, we would need to use one of our irrevocable living trusts. Some clients are less interested in asset protection, and more interested in using the trust as a way to avoid probate. That trust would be a revocable living trust. However, if that trust is designed to hold property after the death of the settlors for their children, for example, the trust then becomes irrevocable when both of the settlors die and the resulting trust has asset protection for the property held by the trust for the children.

Why Would You Recommend a Trust as a Basic Strategy for Proper Estate Planning versus Other Methods?

Using a trust is more sophisticated than a basic estate plan with a will. We include a will in all of our estate planning packages as well, but if we are also using one or more trusts that include all of the person’s assets, the will becomes superfluous in the end.  The will becomes a "pour-over will."  Anything that did not get linked to the trust then goes through the will. The will pours over into the trust. So, ultimately the terms of the trust controls the distribution.  

For more information on Trusts In Texas, a free initial consultation is your next best step. Get the information and legal answers you are seeking by calling (512) 288-3200 today. Our Travis County Trust Administration Lawyers will guide you and will help you come up with an estate plan.