We Help DFW and North Texas Families With Their Estate Planning Needs
At Warren & Migliaccio, we recognize that thinking about your own passing can be a challenging and emotional experience. However, estate planning has many benefits, like peace of mind and security for you and your loved ones. Our trust attorney in Dallas aims to make setting up a trust and estate plan as straightforward as possible.
Whether you are ready to set up an estate plan or exploring whether a trust is right for you, do not hesitate to schedule a consultation with our firm. We are happy to answer your questions and discuss your needs and goals during a consultation. We can also discuss potential estate planning tools, the benefits of each, and how we can help you establish your estate plan. Call our Dallas estate planning lawyers at (888) 584-9614 or contact us online to get started.
What Is a Trust in Texas?
A trust is a legal arrangement in which a property owner transfers assets to a trustee, who holds and manages the assets for the benefit of designated beneficiaries, as outlined in the trust agreement. A trust includes four main components. These components include:
- Grantor or settlor. The grantor or settlor is the individual who creates the trust. The settlor decides the terms of the trust, including the beneficiaries and how the assets will be managed and distributed. They also transfer ownership of their assets into the trust.
- Trustee. The trustee is responsible for managing and executing the trust according to its terms. This role involves handling the assets, making investment decisions, and ensuring the beneficiaries receive their distributions as the trust dictates. The trustee has a fiduciary duty to act in the best interest of the beneficiaries.
- Beneficiaries. The beneficiaries are the individuals or entities the trust benefits. Beneficiaries have rights to the assets or income of the trust, as specified in the trust agreement. There can be primary beneficiaries, who are the first to receive benefits, and contingent beneficiaries, who receive benefits if the primary beneficiaries cannot.
- Trust assets. The trust assets are the assets that the grantor transfers into the trust. They may include real estate, investments, cash, or other personal property. The assets are managed by the trustee but owned by the trust.
What Are the Benefits of Setting Up a Trust in Texas?
It is essential to understand that there are many types of trusts that you can use in estate planning. Each type of trust serves a different purpose based on your needs and goals. However, generally, the benefits of establishing a trust as part of your estate plan include the following:
- Control over asset distribution. Trusts can specify how, when, and to whom to distribute your assets after your death.
- Avoiding probate. Assets in a trust bypass the probate process, allowing for a quicker and often less costly distribution to beneficiaries.
- Privacy. Unlike wills, trusts are not part of public record. Therefore, you and your family maintain privacy in your estate and its distribution.
- Valid in the event of incapacitation. Unlike wills, which do not go into effect until death, trusts go into effect as soon as they are signed and funded.
- Asset protection. Irrevocable trusts offer protection against creditors, other claimants, and lawsuits.
- Reducing estate taxes. Assets you transfer into an irrevocable trust generally are not part of your taxable estate.
- Qualifying for or maintaining government benefits. By transferring assets into specific types of trusts, you can ensure that you or a beneficiary qualify for or maintain certain government benefits.
Types of Trusts a Trust Lawyer in Dallas Can Help You Establish
Many types of trusts are available to help you protect your assets and your family. Each type of trust serves a unique purpose and can be used to fit your individual estate planning needs. However, the most common types of trusts include revocable and irrevocable trusts, which we discuss in detail below. An experienced Dallas trust attorney can help you understand which trust is best for your estate planning objectives.
Revocable Living Trusts
Revocable living trusts, often just called living trusts, allow you to include the assets you want, designate beneficiaries, and outline how the assets will be distributed upon your death.
In many cases, the creator of a living trust, also known as a grantor or settlor, is also the trustee or manager of the trust. You have complete control over the assets during your lifetime. Additionally, you can amend or revoke the trust at any time while alive, as long as you have legal capacity.
When you pass away, the trust becomes irrevocable, meaning no one can alter the terms of the trust. A designated successor trustee transfers the assets to your beneficiaries according to your established terms.
The most significant advantage of using a revocable living trust is to avoid probate. If you die in Texas with a will, or even without a will, your estate must go through the probate process. Probate is a court-supervised process that oversees the transfer of your property to your beneficiaries. This process can take months or even years and be costly from court and attorney’s fees.
With a revocable living trust, you can avoid delays with the court system. Transferring your assets is a private and more efficient process.
Irrevocable Living Trusts
Unlike revocable living trusts, irrevocable living trusts do not allow you to maintain control over your assets during your lifetime. You relinquish ownership rights to the assets you transfer into an irrevocable trust.
Once you establish the terms of an irrevocable trust, they are difficult to change or revoke. Generally, you cannot modify or revoke it without the permission of the grantor’s beneficiaries or by court order. With these strict rules, why would you consider setting one up? You may consider an irrevocable living trust for the following reasons:
- Asset protection. Because the assets in an irrevocable living trust no longer belong to you, they are protected from creditors and legal judgments.
- Tax savings. Assets in an irrevocable living trust are generally removed from the grantor’s taxable estate.
- Government benefits. Moving assets into an irrevocable trust can reduce your estate, ensuring you or a loved one qualify for or maintain eligibility for specific government benefits.
Other Types of Trusts
While revocable and irrevocable living trusts are common in estate planning, there are many types of trusts to choose from. A few examples of other types of trusts that we can help you establish include, but are not limited to:
- Special needs trusts. You can use a special needs trust to provide for loved ones with disabilities. A special needs trust allows you to leave an inheritance for your loved one while ensuring they do not lose their eligibility for specific government benefits.
- Charitable trusts. Charitable trusts are irrevocable trusts set up to provide benefits to a charitable organization or non-profit while offering you potential tax benefits.
- Spendthrift trusts. Spendthrift trusts are generally established for beneficiaries considered “spendthrifts,” or people who spend recklessly. By including restrictions in the trust, you can protect a beneficiary’s inheritance from their own potentially reckless spending. However, you can also use a spendthrift trust to protect young beneficiaries and assets from creditors and other claimants.
- Testamentary trusts. Testamentary trusts are created as terms of a last will and testament. Unlike other trusts, a testamentary trust does not go into effect until the settlor’s death and after the will goes through probate. You may consider setting up a testamentary trust in any situation where immediate distribution is not in the beneficiary’s best interest. For example, if you have minor children, you may set up a testamentary trust to pay out the money when your child turns a certain age.
The list above is not exhaustive of the types of trusts you can use in your estate plan. No matter your situation, a Dallas trust attorney from our firm can determine the best tools to meet your estate planning objectives.
Our Dallas Trust Lawyers Serve Individuals and Families Across North Texas
At Warren & Migliaccio, our team of Dallas trust attorneys works with individuals and families throughout DFW and North Texas to plan for the future with comprehensive estate plans. We are committed to providing tailored estate plans that meet our clients’ unique needs and objectives. A few of the counties and cities we provide estate planning services in include, but are not limited to:
- Collin County: Plano, Frisco, McKinney, Allen, Murphy, and Anna
- Dallas County: Dallas, Irving, Garland, DeSoto, and Farmers Branch
- Denton County: Denton, Lewisville, Little Elm, The Colony, Corinth, and Highland Village
- Rockwall County: Rockwall, Fate, and McLendon-Chisolm
- Tarrant County: Fort Worth, Arlington, North Richland Hills, Euless, Bedford, and Kelle
Is a Trust Better Than a Will in Texas?
Our trust attorneys in Dallas, TX assist North Texans in creating estate plans that meet their needs and goals. In most cases, we recommend using various estate planning tools to ensure your plan is comprehensive and does not leave any significant gaps that could cause delays or issues in the distribution of your estate.
Both wills and trusts have unique advantages. However, each tool also has limitations. For example, a trust does not allow you to designate guardianship for your minor children, but a will does. In most cases, you, your family, and your estate are better protected by using both a will and a trust.
Related: Living Trust vs. Will in Texas
Contact a Dallas Trust Lawyer to Discuss Your Estate Planning Needs Today
At Warren & Migliaccio, we understand that estate planning may feel overwhelming and complicated. Our team of experienced Dallas trust attorneys is here to take the stress out of estate planning. We can help you establish a trust and estate plan that aligns with your needs and goals.
We welcome you to contact a trust attorney in Dallas from our firm to schedule a consultation. During a consultation, we can answer your legal questions, discuss your objectives, and highlight how we can help you prepare a legally sound and comprehensive estate plan. Call us at (888) 584-9614 or contact us online, and we will contact you soon.