Trusts – What are They and Should I Have One?
Trusts are not just for rich people! Here are some questions to consider:
Do you own real property?
Do you have a bank account?
401k?
IRAs?
Life Insurance?
Separate property that you have inherited or purchased by yourself prior to marriage?
Do you have young children?
Do you have children (regardless of age) that you worry about being responsible with money?
If you said yes to any of the above questions, then a trust might be suitable for your estate plan. We can help you navigate this process.
Real property. Transferring your real property into a trust helps to avoid that property from going through probate and having a court decide where it goes.
Bank accounts, 401k and IRAs. You may have beneficiaries already listed on these. However, things change over time, and what if the beneficiary listed predeceases you? Having a trust set up will ease the burden of going through probate to finalize where your money goes.
Children. If they are under the age of 18, they will need a trust. Our Austin trust attorney can even add provisions to take care of the guardian who will be bringing your children into their home. If they are over 18, you can determine what happens with the money they may inherit. Our estate administration lawyer offers a stair-step distribution such as 25% at 25 years old, 25% at 30 years old, 25% at 35 years old and the remainder at 40 years old. Our trust lawyers offer language that asks the trustee to serve in a mentorship role as well as counseling and maintaining the lifestyle your children are accustomed to (summer camps, sports, private school, and social or educational activities).
Separate property. If you have money, property and/or personal items that were gifted to you from a relative, our trust administration attorneys consider that separate property. We ensure that we fulfill your wishes to keep these items as separate property.
How do you set up a trust? We do it for you! You tell us what you want to happen and our estate planning attorneys will make it happen. There are several types of trusts. The most common is a revocable trust which means you can make changes anytime you want. We start with this trust and create a specialized trust that fits your needs. The revocable trust will have provisions that take place that determines what happens while you are alive, when you are incapacitated, and once you pass away.
Once you have made all of the decisions of who receives what, the only decision left is who you want to appoint as trustee to make sure this all happens. Your trustee will need to be someone that is trustworthy. If you do not have someone that you feel comfortable with giving this much responsibility, our trust attorneys have a list of corporate trustees that we can suggest to take care of you.
If you have a trust, do you need a will? Yes! They go hand-in-hand. The will that we prepare is called a pourover will (or as we call it, an “oopsie will”) which takes anything that was not mentioned in the trust (“Oops! I forgot to add…”) and now places it in the trust. There are two things that the trust will not automatically cover. The first is that the trust does not automatically include real property. So, if you purchase property after you sign your trust, you either need to make sure you purchase using the trust’s name or reach out to us and we can prepare a deed to transfer the property into the trust. The second is your vehicle. The DMV has quite the list of requirements to transfer the title into the trust’s name. It can be done, but do not usually recommend this unless you have a 1965 Mustang Shelby GT (or similar collector car).
If you have more questions or if you would like the idea of having a trust to avoid your assets and property going through probate, contact us to meet with one of our estate planning attorneys.