Securing Better Futures for Our Clients’ Families
If the extent of your estate plan is your will, you are missing an important opportunity to optimize its effectiveness. By establishing a trust, your loved ones can administer your estate without getting the courts involved. There are also important benefits that can protect your property from creditors and reduce your estate’s exposure to taxation.
Our Dallas trust attorney, Jason M. Tyra, can provide all of the guidance and services you’ll need when it comes to establishing a trust. In many cases, clients know what they want a trust to do but don’t quite know how to achieve their goals. Rest assured that our trust lawyer in Dallas has the knowledge and experience necessary to provide competent counsel that takes your unique objectives into account.
For more information about our services and how we can help you, please reach out to Jason M. Tyra, PLLC today to schedule a consultation.
What Are the Main Benefits of Establishing a Trust?
People set up trusts for a variety of reasons, but for many, there are a few common benefits that are widely appreciated.
Some of the many benefits of creating a trust include the following:
- Avoid probate, which can be costly and time-consuming
- Maintain privacy (because probate becomes a public record)
- Protect assets
- Reduce the estate’s exposure to taxation
- Name a trustee to administer property held in the trust
- Name beneficiaries, who will inherit property according to specific instructions
- Reduce likelihood of legal claims
- Provide a path toward Medicaid eligibility
What Are the Most Common Types of Trusts?
There are many different types of trusts that can be used for a variety of niche purposes. Ultimately, however, there are two main types of trusts in common use revocable and irrevocable.
Deciding which of these trusts to use comes down to a few main factors:
- Can the grantor (person who created the trust) modify a trust after execution?
- Who/what legally owns the property in the trust?
- Are the assets protected against the grantor’s creditors?
- Will assets held in the trust be subject to federal estate taxes?
Revocable Trusts
When a grantor creates a revocable trust, such as a revocable living trust, they assign a trustee to manage the trust and any property funded into it. Because the trust is revocable, the grantor can change its terms and even reassign the trustee.
Because the grantor also still legally owns the property held in this trust, they can remove it as well. A possible drawback, however, is that the grantor’s creditors can still go after property held in a revocable trust. Another consideration is that property in a revocable trust is also subject to federal estate taxation if it meets a certain threshold in value.
Irrevocable Trusts
Irrevocable trusts are those whose terms can’t be modified after the trust is created. Once a grantor has established this trust, they relinquish control over it and any property they fund into it. This means that assets become the legal property of the trust, which allows it to avoid federal estate taxation upon the grantor’s death, regardless of its value.
People typically establish irrevocable trusts when they want to shield their property from federal estate taxation, protect a loved one’s eligibility for certain government assistance programs, or guard the property against a beneficiary’s or their own creditors.
Do I Need an Attorney to Set Up a Trust?
There is no legal requirement for hiring an attorney to help you establish a trust. That said, this is a very complicated and sensitive process to attempt to carry out on your own.
By hiring an attorney to help you set up a trust, you can rest assured that the conditions you carefully considered will be carried out as you intended after you pass away. You can also benefit from the peace of mind of knowing that you’ve taken all of the necessary steps to ensure that your estate avoids getting chipped away by unnecessary taxation and fees.
If you’d like to learn more about the benefits of having an attorney help you create your trust or estate plan, reach out to Jason M. Tyra, PLLC today. Request a consultation.