Trusts
MCKINNEY TRUSTS LAWYERS
Drafting Your Trust in McKinney, Texas
Creating a trust can be critical part of the estate planning process, and can help save your family time, frustration, hassle, and confusion in the event of your death. By having a trust in place, you can have control over how your assets are distributed when you die rather than having the State of Texas decide how your property will be divided.
At Willingham Law Firm, PC., our estate planning attorneys understand how important it is to have a comprehensive and legally sound trust in place. We work with clients in the McKinney area to help them achieve their unique estate planning objectives in a fast, affordable, and effective manner.
Are you considering setting up a trust? For the skilled legal guidance you need, contact our McKinney trusts attorneys today.
Advantages of a Trust
Some of the advantages of having a trust in place include:
Having control over how and when your assets will be distributed after death
Reducing the amount of gift and estate taxes
Avoiding the time, cost, and hassle associated with probate
Being able to name a successor to manage your trust after you die
Ensuring security for your loved ones
Protecting the privacy of your personal financial affairs
Avoiding disputes over your assets after death
Trusts vs. Wills in Texas
Some of the most common questions about trusts revolve around their cost and the benefits that they provide in comparison to a will. The simple answer is that, because they are more complex, trusts do require more legal sophistication and typically cost more. However, trusts offer numerous advantages that wills do not.
With a will in place, you only have the power to transfer property to another individual. This means that designated recipients who are minors receive property, but, because they do not have the same rights as an adult, they will have a court-appointed guardian over the estate. This guardian has access to the child's finances, can make determinations on what is in the best interests of the child, and potentially take advantage of the situation.
With a trust in place you can designate how, when, and why someone receives your property, and even designate a trustee over the finances, giving you a higher degree of control and more peace of mind.
Influence the Use of Your Property After You Die
By controlling the property, you are not manipulating or controlling your heirs or their lives. Rather, this is about ensuring money isn’t foolishly squandered, your family isn’t taken advantage of, and ultimately, you are preserving their inheritance and your legacy, so it can be advantageous to future generations. Regarding their estate plans and what potentially might happen to property after they pass, many people surprisingly seem content to simply let their children handle it when the time comes.
Those who don’t demonstrate a desire to influence the use of their estate, generally fall into 1 of 4 categories:
They have very little property about which to be concerned
They don’t want to spend money to create a detailed plan
They implicitly trust those to whom they are bequeathing their property
They haven’t thought about it enough
When Should You Create a Trust to Control the Fate of Your Property?
Can you trust your beneficiaries to handle your property properly, in order to maximize its value and worth for the betterment of the family? If you have any questions or doubts whatsoever, a well-executed trust is necessary. You must look closely at whom you intend to leave your assets: do they save? Saving is the hallmark of fiscal responsibility as it is the trait of someone who takes money seriously and understands its importance long term. Someone can earn a substantial income, but if they blow through it, this is a fairly good indicator of how they would manage your estate.
However, someone with a low income or little savings may be able to manage money well if given the chance. Therefore, you must evaluate if they understand how to save. Saving is very much a learned behavior, as it takes practice. Depending on the age of your beneficiaries, perhaps they have not had enough time and life experience to hone their saving practices. You may also need to think about the person’s capacity to handle large sums of money. Unfortunately, there have been too many instances in which someone inherits a substantial amount, only to be bankrupt 5 years later. If your proposed beneficiaries are not qualified to deal with large sums, you can help the situation by offering them to a qualified person. There is nothing wrong with setting up a trust which gives a credible party the responsibility of distributing money slowly, over a given period of time.
Finally, in the case of a special needs beneficiary, you need a trust. Trusts for beneficiaries with special needs need to comply with certain specific rules, since the beneficiaries may be receiving government benefits. If money is left directly to individuals receiving government benefits, the individuals may lose these benefits and/or upon the passing of the special needs beneficiary, any remaining money could end up in the government’s hands. You may establish a Supplemental or Special Needs Trust, which, as its name suggests, supplements those government benefits rather than supplanting them. Therefore, instead of leaving the money directly to your loved one, it is left to the trust which will then disperse funds as necessary; this does not leave assets vulnerable to eventual government control.
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