Choosing a reliable trust attorney in Houston, TX, is an important decision that will affect your family for years to come. Most attorneys can assist in drawing up a traditional will, but you truly need an attorney with experience in trust law to ensure your estate plan is going to accomplish your goals. In addition, you need an attorney who can help you choose the kind of trust that will be right for you. Estate planning is not as simple as creating a will online using a generic template. A trust attorney in Houston, TX can help you create a customized estate plan tailored to your specific needs and goals.
What is a Trust?
A trust is an arrangement that designates a third party, or trustee, to hold certain assets on behalf of another person or persons, called beneficiaries. There are several kinds of trusts, each with a different goal. They may be revocable or irrevocable. Trusts usually can keep information about a person’s assets private, while assets listed in the probate process become a matter of public record. If the creator holds property in more than one state, putting this property into a trust can avoid requiring that the estate goes through multiple probate proceedings. A reliable trust attorney in Houston, TX will explain the various types.
Some may pass on a person’s assets before or upon his death, while others may hold all or part of these assets after death, distributing interest from the assets to the named parties. This latter type is most often used when a minor child or children are involved, allowing for the children to receive an income payment until they reach a certain age, at which time the children are allowed access to all or part of the main part of the assets. This central part is usually called the “corpus” of the trust.
For example, a marital trust provides for assets to pass to a surviving spouse upon death. These assets are then available to the spouse more quickly than if he or she has to wait until the will is probated. If the spouse is the only beneficiary to the estate, probate may not be necessary, saving probate fees and costs. A generation-skipping trust allows a person’s assets to go to the deceased’s grandchildren. It can save taxes later on.
Trusts are divided into two groups: revocable or irrevocable. A revocable trust, also known as a living trust, helps your assets pass on outside of probate while allowing you, the grantor, to keep control of the assets during your lifetime. For instance, a trust may deed a home to another person, but allow the grantor to live in it until death. Bank accounts likewise may still be accessed by the grantor. It can be dissolved at any time should your intentions or circumstances change. The grantor is usually the trustee during his lifetime, but another trustee can be named to manage the assets after the grantor’s death. The assets are still subject to estate taxes, but probate is simplified. Houston trusts attorneys can advise you on this.
An irrevocable trust usually will transfer the assets out of the grantor’s estate and may avoid probate and some estate taxes. It can also protect assets against any possible legal judgment. However, once in place, the grantor cannot rescind it or change it. You can see that choosing the right Houston trust law attorney is an important decision when deciding whether to form a trust and which kind to choose.
What is a Will?
A will is a legal document that contains instructions on what should be done with a person’s money and property, both real and personal, after his death. It can also contain other instructions, such as naming a legal guardian for a person’s minor children and what should be done with the person’s pets.
A will usually names an executor or executrix to handle the distribution of the estate’s assets after the writer’s death. This executor may also handle such matters as arranging for the deceased’s funeral, organ donation, arranging payments of any debts outstanding at the time of death, such as credit card bills. Other duties may include arranging for the sale of a home if this is requested in the will, distributing an official death certificate to those entities that require it, such as a life insurance company, and other such duties. The executor may also be granted a certain amount of money as compensation for carrying out these duties, especially if he is not an immediate family member.
How is a Trust Created?
Finding an experienced trust attorney in Houston, TX is imperative to creating the right trust fo your family. The person creating the trust is known as the grantor. The person holding the assets and administering the trust is called the trustee.
There are certain specific steps involved in creating a trust. Houston trusts attorneys can help guide you through the process. The grantor or settlor creates the trust agreement, designating the grantor, trustee and beneficiaries. It outlines how the assets are to be managed and distributed.
The trust is then funded. For example, real estate is transferred to the trust with a deed. Personal property, such as vehicles, stocks, bonds, and manufactured homes, are transferred by title. Other personal property can be designed by a description. There may be some special consideration with assets such as retirement plan accounts. Your attorney can advise you on these.
An experienced Houston trust law attorney can set up a trust within a couple of weeks. This varies depending on how quickly the grantor can get the relevant information submitted and the proper titles and deeds.
Different states have their own unique requirements for creating a trust. The following requirements must be met in Texas to form a valid trust:
A trustee may be a person or a financial institution. Some banks, for instance, have trust divisions that allow the bank to handle the trustee’s responsibilities. In any case, after the grantor’s death, the trustee is responsible for obtaining death certificates, filing the will with the probate court, notifying the beneficiaries, making an inventory of the assets contained in the trust, maintaining a records system, getting any necessary appraisals of property, and paying debts owed by the grantor.
Other possible duties include notifying the Social Security Administration and the State Department of Health of the grantor’s death, and securing and caring for property such as a home until it’s sold or transferred. Sometimes the funeral home will do a few things, such as obtaining death certificates and notifying the Social Security Administration.
If you don’t have anyone you wish to serve as trustee, a trust attorney in Houston, TX can advise you on which local banks and trust companies can handle these tasks.
Is a Trust the Same as a Will?
No, they are not. A will designates what will be done with the writer’s assets after his death. It may also designate other things, such as what is to be done with pets or naming a guardian for minor children. The only time a will is used is upon the writer’s death.
A trust, on the other hand, can be used after death but also during the life of the creator. A trust holds assets conveyed by the creator with a trustee to manage them to benefit a person or purpose, such as a charity. Trusts can have a specified term, either the duration of the grantor’s or another person’s lifetime and then distribute them.
Creating a trust can be a bit confusing, especially considering the different kinds of trust that can be formed. This is why choosing a qualified Houston trust law attorney is a must to help you choose the trust type that will best meet your needs and help you in any other way you need, such as choosing a trustee, what documents you’ll need to transfer assets into the trust, and other necessary steps.
Your attorney can also help you in drafting a will. Even with a trust, you’ll still need a “pour over” will. There are some things a will can accomplish that a trust cannot, such as designating a guardian for your children. In addition, transferring property such as furniture and vehicles to a trust may not be practical. Some property may not be permitted to be transferred into a trust. An experienced trust attorney in Houston, TX can provide peace of mind for all estate planning matters.