There are many different types of trusts to fit many different types of situations and property. A Trust can be either revocable or irrevocable and there are many benefits to putting one in place.
Revocable Trust: If the person who sets up the trust reserves the right to revoke, amend, terminate, or change the Trust after it becomes effective, then the Trust is said to be a "revocable trust."
Irrevocable Trust: An “irrevocable trust” cannot be amended, terminated, revoked, or changed by the settlor after it has become effective.
There Benefits of a Revocable Trust:
The first reason is for privacy. If you have a Will when you die, the Will goes through the probate process and is made public. Using a Revocable Trust will keep your assets and your beneficiaries completely private.
The second reason for a Revocable Truist is if you own real property outside the state of Texas. Without a this trust, your loved ones will have to go through the probate process in every state that you own property.
The third reason for an Revocable Trust is to avoid elder exploitation. The trust has safe guards in place that will help stop exploitation and protect their assets.
The Benefits of an Irrevocable Trusts:
An Irrevocable Trust is different than a Revocable Trust. If you transfer some or all of your property to an irrevocable living trust, you are giving up all your rights to that property. High net worth individuals often use Irrevocable Trusts as asset protection to protect their property from creditors and also to provide perfect asset protection for their children and grandchildren.
Naming a Trustee of a Trust:
When naming the Trustee of your Trust, we often recommend a appointing a corporate trustee in order to maintain the familial relationship. It is also best practice to NOT name one adult child as the Trustee over another adult child.
Minor Children and Trusts:
In the state of Texas, minor children under the age of 18 cannot legally own any real property or be entitled to receive any assets. This means that if minor children are designated as beneficiaries, they need a guardian of the estate appointed by the Court to control the assets or property on their behalf until they turn 18 years old. Appointing a guardian can be a long and costly process. Trusts are set up so that the minor children can benefit from the Trust funds without having to be supervised by the Court.
For more information on Trusts, please find the following articles: