A trust is a powerful estate planning tool that a person in Texas can create while he or she is alive and can survive the individual’s death. Trusts can additionally be created by wills and formally established in the event of one’s death. Trusts essentially are rights in property that are held in fiduciary relationships by certain parties for the benefit of others.
Different types of trusts exist. A revocable trust is created during the grantor’s lifetime and can easily be modified or revoked entirely. Also known as a living trust, it is helpful for avoiding the lengthy process of probate. Assets placed in a revocable trust will not end up being subject to probate.
Asset protection trusts make up another category of trusts and are created to safeguard assets from future claims by creditors. This type of trust is usually irrevocable for a few years, and the maker of the trust is typically not the trust’s current beneficiary. Once the trust is terminated, assets in the trust that have not been distributed can be returned to the maker given that no risk of attack by creditors currently exists.
A special needs trust can also be beneficial for leaving assets for an individual who gets government benefits, without disqualifying the person from the benefits. This is legal under the rules for Social Security. An attorney can offer guidance about the various trusts that are available in Texas and which one may be best for meeting one’s immediate needs and long-term goals.
Source: findlaw.com, “Types of Trusts“, Accessed on Jan. 17, 2017