If you have plans to leave your estate, assets, and valuables to your loved ones, but would like to spare them the lengthy, cumbersome probate process, a “trust” is just the tool for you. So, what exactly is a trust, and what does it entail? Well, this guide has the answers.
In this article, we will walk you through what a trust is, how trusts work, what a will is, what estate planning is, and how a Trust attorney in Plano can help create a trust. With that said, let’s jump straight in.
What is a Trust?
A trust is a legal arrangement that allows a trustee or third party to hold, manage and direct your assets or valuables on behalf of a beneficiary. The beneficiary can be anyone – not necessarily a family member or friend.
Situations that May Necessitate a Trust
So, why would you need to hire a Plano trusts attorney to create a trust? Well, there are several scenarios that may necessitate creating a trust. Here are some of the possible situations where creating a trust will be essential.
First, if you have a loved one, whether it’s a family member or a friend who has a disability, creating a trust will be particularly beneficial. By hiring a Plano trusts attorney to help you create a trust, you will ensure that they will continue receiving adequate care even after you have passed. A qualified trust attorney in Plano can help you create such a trust if you happen to be in this situation.
Second, hiring a trust attorney in Plano to create a trust for you will be crucial if you have young children (under the age of 18). Having a trust fund will ensure there are sufficient funds to take care of your minor children until they are grown. Such a trust fund will cover various expenses like health, education, maintenance, and support.
Third, if you have a loved one struggling with mental illness or addiction, a trust can be instrumental in getting them the help they need. Frequently, people are concerned about leaving large sums of money to such family members in fear that the extra funds will only further or enable a “bad habit.” However, a trust will allow your loved one to receive the funds they need without compromising their health or sanity.
A trust attorney in Plano can help you craft a trust with conditions and rules regarding how your loved ones will receive the money you leave behind.
For example, you can specify that you want your money to be paid directly to a medical provider, an educational institution, or a landlord, as opposed to the money going directly to the individual. Fears that a loved one may squander the money or use the funds frivolously is a serious concern that can be alleviated with the use of a trust.
This estate planning tool will ensure that you can continue to look after that individual when you are gone. At the same time, you will also ensure that the individual won’t end up misusing the assets you’ve left behind.
Finally, trusts are crucial tools if you collect valuables. You can set up a trust if you have a sizeable collection of prized valuables like rare coins, art, or stamps that have taken decades to build. A trust will direct to whom you will leave various pieces of your collection. Additionally, you will retain key documents pertaining to these valuables, like certificates of authenticity, insurance appraisals, and bills of sale.
Furthermore, a trust can be beneficial if you own an organization or business. Creating a successful business or organization doesn’t happen overnight. Thus, you want to ensure that your business will continue thriving even if you are incapacitated or deceased.
In such a situation, you should consider hiring a Plano trusts attorney to create a trust for you, detailing your succession plan. This action plan will ensure your business is left in good hands if you are no longer able to run it.
Benefits of Creating a Trust
Creating trusts comes with numerous benefits. By creating a trust with the help of a Plano trusts attorney, you will guarantee that your assets or valuables will transfer to your preferred beneficiary, either when you are alive or after death.
Besides ensuring that your assets or valuables will go to your preferred beneficiary, hiring a trust attorney in Plano Te,xas to help you craft a trust will also help the beneficiary avoid the lengthy and costly probate process. Hence, by working with a Trust attorney in Plano to create a trust, your beneficiaries will have access to your assets quicker and more seamlessly compared to a situation where there is none.
How Do Trusts Work?
As mentioned above, a trust is a legal vehicle allowing a trustee or third party to hold and direct assets or valuables in a trust fund on behalf of a selected beneficiary. In this case, there will be two parties – the grantor and the trustee.
So, how do trusts work? First, the grantor will work with a trust attorney in Plano to come up with the trust document. This document will be created in line with the grantor’s wishes for their property or assets. Second, the grantor will choose their preferred trustee to hold, administer and direct property or assets on behalf of the selected beneficiary.
What is a Will?
This document is also known as a last will and testament. A will is a legal document detailing how to distribute your wealth and assets after your death. For instance, a will or testament will direct how your cars, land, houses or other possessions will be distributed among your loved ones. It will also direct who will care for your minor children. In short, it will make things easier for your beneficiaries to fulfill your last wishes.
Why You Need a Will
There is a common misconception that wills are only meant for the wealthy. But, anyone above the age of 18 should have a will – regardless of whether you consider yourself rich or not. Hence, if you are 18 or above, make sure you hire a qualified wills and trusts attorney in Plano TX to help you draft a last will and testament.
Without a will, your assets or valuables will be distributed according to applicable state laws. In other words, the courts will decide how your assets are distributed. And as you may expect, it’s likely your assets will not be distributed according to your preference. For example, if you have an estranged sibling or parent, the laws of intestacy may dictate a portion of your wealth must pass to an indidividual that you haven’t spoken to in 20 years!
Additionally, if you live in Texas and you die intestate (without a will), your property will be distributed to your closest relatives. In this case, the distribution will begin with your spouse and then to your children. It will then branch out to your relatives, meaning a distant relative you barely knew, disliked or had disagreements with may end up taking ownership of your property.
Also, if you die without a will, the courts will designate a guardian or caretaker for your young children.
Further, having a testament will make it easier and quicker for your beneficiaries to access your assets. People claiming to be beneficiaries of your property will go to court without a will and the case may drag on for years in probate court, denying legitimate beneficiaries like your children or spouse access to your property.
Types of Wills
There are several types of wills. Some of the most common ones include simple or testamentary wills, reciprocal/joint wills, holographic or handwritten wills, pour-over wills, and nuncupative or oral wills.
Differences Between a Will and a Trust
Most people assume that trusts and wills are the same estate planning tools. But, this is not the case. As much as both are legal documents detailing how your assets will be distributed to your beneficiaries upon your demise, they are vastly different.
The main difference between wills and trusts is that a will must go through a court process known as probate upon the property owner’s demise, while a trust is a probate avoidance tool. During this court process, a court administrator will review the will and give potential beneficiaries a chance to contest it publicly.
On the other hand, trusts don’t require court approval and are entirely private. You can create a trust with the help of wills and trusts attorney in Plano, Texas, and it can be active while you are still alive. On the contrary, wills only go into effect after death.
What is Estate Planning?
Estate planning refers to the process of creating a plan in advance of how you would like your assets to be distributed when you die. Estate in this case refers to everything you own, including your home, cars, jewelry, artwork, furniture, other real estate, savings and checking accounts, life insurance policies, investments, personal possessions and family heirlooms, just to name a few.
By working with a Plano trusts attorney to plan your estate, you will confirm that your chosen beneficiaries will receive your property in the easiest, most cost efficient manner possible.
Wrapping It Up
Creating a trust while you are still alive will ensure that property will go to the right people after your death. An experienced wills and trusts attorney in Plano, TX will help you create a customized, legally binding and valid trust for additional peace of mind.