Irrevocable Trust Texas
People often use trusts as a way to protect their assets or plan their estate. When setting up a trust, you place your assets into the trust and then name a trustee to manage them on behalf of the beneficiaries of the trust. The two main types of trusts are revocable trusts and irrevocable trusts. Irrevocable trusts cannot be amended, modified, or revoked. That means that the terms of an irrevocable trust cannot be tweaked except under very rare circumstances.
Benefits Of Trusts
Trusts provide the following benefits:
- Asset protection: Trusts clearly direct that funds be held by a trustee and distributes assets to heirs or beneficiaries on a conditional basis. This helps prevent misuse of assets
- Estate tax benefits: Since an irrevocable trust does not count toward the value of your estate it can reduce the tax burden on assets that tend to rise in value.
- Preserving assets for future heirs: An irrevocable trust protects assets from creditors and various taxes so that future generations can enjoy them.
- Special needs planning: Since people with disabilities already rely on government benefits, you can create a trust to assist a disabled beneficiary so that they do not lose their eligibility for government benefits.
- When a trustor is incapacitated or disabled: A trustor can create a trust that becomes operational when the trustor becomes incapacitated or disabled. The irrevocable trust may make it easier for your family or appointed trustee to manage your assets when you are incapacitated.
- Peace of mind: A trust gives you peace of mind because you know that your assets are in safe hands or will be distributed to beneficiaries you choose.
Contact an estate planning attorney to help you set up a trust and discuss with you the pros and cons of irrevocable trusts.
Creating A Trust Without A Lawyer
There is no do-it-yourself kit for creating a trust because you cannot afford to make even the slightest mistake when creating a trust. You must indicate your intent clearly without making implications or inferences when setting up a trust. Only an experienced estate planning lawyer that is skillful in using the right legal language can express your intent clearly in a trust document. If you do it yourself, you run the risk of using ambiguous language that may cause a lot of problems in the future. No book or estate planning software can cover the full scope of your estate planning needs.
Types Of Irrevocable Trusts
The following are the different types of irrevocable trusts:
- Charitable trusts
- Credit shelter trusts
- Life insurance trusts
- Special needs trusts
- Spendthrift trusts
- Qualified personal residence trusts
- Inheritance trusts
- Grantor-retained interest trusts
- Qualified Domestic trusts
- Qualified terminable interest property trusts
You need to be certain of your intentions before creating an irrevocable trust. Whether or not an irrevocable trust is suitable for your situation depends on what type of protection you are seeking for your property or heirs. You don’t have to be wealthy to establish an irrevocable trust.