| |
There
are many types of trusts. Trusts created during the lifetime of
the trust-maker, the “Grantor” are referred to as "inter vivos" trusts. Trusts
that “spring” into existence at the death of the Trustor are
referred to as "testamentary" trusts. Trusts are either
revocable or irrevocable. Revocable trusts are only inter vivos
trusts but irrevocable trusts can be inter vivos or
testamentary. Estate planners use both types of trusts for many
reasons and to address many of the challenges in customizing
your estate plan for you and your family’s situation.
Revocable Living Trusts
Revocable Living Trusts AVIOD PROBATE and are a must for
clients who meet any ONE of the following criteria:
* If you own real property or will inherit real property in
another state or country (yes, timeshares too)
* If you or your spouse have been diagnosed with a
debilitating illness
* Privacy is important to you and your family
If you or a family member may be applying for Medicaid or
other federal assistance you will also want to consider a trust.
In Texas, however, probate is not nearly as intimidating and
costly as it is in many other states so although the revocable
living trust is the preferred dispositive tool it is not
mandatory as it is in many states.
If you have a revocable living trust from another state you
will want to have it reviewed to “Texas-size” it as soon as
possible.
|
|
 Irrevocable Trusts
Estate planners use irrevocable trust for many purposes.
Irrevocable trusts, whether they are testamentary or inter
vivos, if properly administered and funded have their own
separate legal identity so they play a significant role in
estate and asset protection planning.
The irrevocable trusts can be drafted...
- to “supplement” the benefits of a person who receiving
SSI (SNT)
- to hold the income or resources of a client who is
applying for Medicaid (Miller or QIT etc.)
- to care for a child or grandchild with “special needs”
after the death of the parent or grandparent for the
lifetime of the child or grandchild
- to “bypass” all or part of the estate tax liability of
the estate(Bypass)
- to hold life insurance separate from the estate so that
it avoids the estate tax but is available to assist the
family when needed (ILIT)
- to assist with educational expenses for a child or
grandchild (2503(c))
- to set aside property in second marriage situations for
the benefit of the new spouse and still protect the familial
wealth for the children
- to protect family wealth
- To hold marital deduction property (QTIP)
- to protect a spendthrift child from him or herself
- to preserve familial wealth
- to protect assets from creditors….
- And many other uses
|
|
