What is a trust?

| Dec 5, 2019 | Estate Planning |

To many people in Texas, the estate planning process is based solely on the creation of a will. While this document has an important job, such as naming a guardian for a deceased child, there are other tools that can be beneficial. For example, many people decide that a trust is a good option for managing their assets and providing protection for them.

A trust is an agreement between the trustor (person whose assets are being addressed), trustee (the party responsible for managing the assets) and the beneficiaries. Once created, assets must be placed into the trust. Unlike a will, a trust can help avoid the lengthy and public probate process.

A living trust is a common tool used by many. This trust is created during the trustor’s lifetime, but the assets will be distributed upon their death. There are two types of living trusts: revocable and irrevocable. A revocable trust can be altered during the trustor’s lifetime, such as in the event of a divorce. On the other hand, an irrevocable trust can not be changed; essentially, once assets are placed in an irrevocable trust, the trustor no longer owns them.

There are many misconceptions about the role of a trust and for whom they are most appropriate. It is a tool for anyone who wants to provide protection for their assets and also help ensure they are distributed according to their wishes. An experienced attorney can help those contemplating the estate planning process in Texas fully understand the tools available to them to protect their assets and help them determine which are most appropriate for their individual circumstances.