» Trusts

In a revocable trust — also called a revocable living trust — you initially serve all three roles: you create the trust as the settlor, you are in charge of the trust as the trustee, and you benefit from the trust as the beneficiary. You name another person to take over as trustee after your incapacity or death, and that person is in charge of the trust for whomever you choose to be the new beneficiaries. You can change this trust as much as you want while you are alive.

A testamentary trust is a trust that is created within your will. This trust does not come into existence until your death. It acts sort of like an account that holds an inheritance for someone else. You specify the rules of the trust such as if the trust will pay for college or a wedding or travel and how old a beneficiary must be before getting the money out of the trust.

A special needs trust — also called a supplemental needs trust — allows money to be set aside to take care of someone with disabilities without disqualifying the person from public benefits. If you have a child or grandchild who is receiving public benefits due to a disability, it can be very important to set up a special needs trust for any potential inheritance.

A trust has many potential purposes.

Protecting children’s inheritance

In estate planning in Texas, McCreary Law Office recommends using either a testamentary trust or a revocable living trust if a minor or young adult might inherit your property. This helps protect the inheritance rather than giving everything to the child at age 18.

Protecting inheritance in the future

By creating a trust that can hold a child’s inheritance even into adulthood, you can offer your adult child a lot of protection of her inheritance. This includes protection from claims of a future ex-spouse of your child, from creditors, and others. This can also protect the inheritance in situations such as gambling or drug addiction.

Easing estate planning issues for blended families

For a blended family, a revocable trust can be especially important to make sure a surviving spouse is taken care of and that children from prior to the marriage are provided for.

Protecting privacy

Revocable trusts also can help protect your privacy because when a trust is set up properly, the public inventory can be avoided.

Avoiding probate

Revocable trusts also can make things smoother after death rather than formal probate. Although independent administration in Texas is not complex, probate in Texas can have many layers.

Protecting a beneficiary who has disabilities

A special needs trust can help take care of someone with disabilities without making her ineligible for public benefits.