The Livens Law Firm

Estate planning can benefit by the use of living trusts

There are many reasons why an estate plan in Texas might include the use of living revocable trusts. Such living trusts give the grantor the opportunity to distribute assets while alive and to fashion trusts in the shape and manner desired to provide for one's heirs. Because they are revocable, the grantor retains control over the assets should changes be desired.

A trust can be funded with cash, life insurance, securities or any other assets. The popularly cited benefit of living trusts is that they do not go through probate at death. Thus, they are kept private as opposed to testamentary assets, which are a part of the public record of the decedent's estate.

Furthermore, state and federal taxes may apply to the decedent's estate. Those, however, will not apply to assets that are conveyed during life into living trusts. Such trusts also give the grantor greater leeway in fashioning plans for each heir according to their needs. Similar treatment may be included in testamentary trusts in the testator's will, but the terms are not easily modified after death.

All trusts are amenable to professional management if the grantor prefers to have a money manager controlling the funds professionally. An outside trustee must provide disclosure to beneficiaries and must faithfully abide by the terms of the trusts. Most often, however, the grantor appoints a trustee and alternates who are trusted family members or close friends. 

In Texas as well as elsewhere, it is always necessary to do a thorough review of your estate plan to determine whether living trusts and/or testamentary trusts will be desirable and beneficial. With a variety of assets, investment tools, and numerous options available to choose, it is best to have an estate planning attorney assist in the review and charting of a plan, and then for preparation of the legal documents that go with it. In some instances, it  may also be beneficial to have the assistance of a financial planner onboard to add additional expertise to the process.

Source: cincinnati.com, "Trusts remain useful tool in estate planning", J. Brendan Ryan, Nov. 21, 2014

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