Texans crafting their estate plan might have a notion of the benefits of trusts. But, fully understanding the multitude of trust uses is essentially before creating one.
A trust is a protective device for the beneficiaries. It can shield them from a legal filing, being pursued by creditors or losing assets in a divorce. With an irrevocable trust, a creditor or claimant will not have the ability to get a judgment against a trust's assets.
In addition, a minor child's interests can be protected by establishing guidelines as to the distribution of what is in the trust. A special needs trust is for children who have various issues that require specific care. In addition, it is useful to make certain the child can get Medicare. For a beneficiary who might have questionable judgment in managing assets, there can be an independent trustee to oversee it.
With a trust, the testator can place restrictions in which certain criteria must be met to have access to it. For example, the beneficiary might be told to get an education, take part in community service and more. Maintaining a family's wealth is often a key desire. If there is a divorce or subsequent marriage, the assets can go to people who were not the intended beneficiaries. A trust can ensure the assets go where the testator wants them to go. Many people have pets they are concerned about after they have died. A trust can detail how the pet will be cared for.
Finally, a trust can maintain harmony between the family members. To avoid a dispute, having a detailed trust with exactly what the testator wants can make great headway into preventing acrimony. It might be difficult to consider the inevitable and mortality, but it is necessary. Trusts are a solid way to take care of a variety of issues that will come to the forefront after death. Discussing types of trusts with a lawyer experienced in estate planning is an important first step.
Source: Forbes.com, "6 Things A Trust Can Do That You May Not Realize," Mark Eghrari, Oct. 27, 2017