The attorneys at Vacek & Thain, PLLC have prepared almost 10,000 trust-based estate plans! And more, we know trust planning works. That is because we have also helped our clients to settle, or administer, over 3,000 of our trust plans after the death of one or more of the trust creators. We strive to educate our clients and to assist them create the very best estate plan for them and their families. This is why we regularly offer free estate planning seminars and free private initial consultations with an attorney. Please see our schedule for upcoming free estate planning seminars. Additionally, below are some commonly asked questions and answers of Revocable Living Trusts.
What is a Trust? A Trust is an arrangement where one or more persons (the Trustees) hold and manage property for others (the Beneficiaries). When you create a Trust, typically, you will serve as trustee of your Trust while you are able and willing. When you no longer serve as trustee, a successor trustee of your choosing takes over for you.
What is a Revocable Living Trust? A Revocable Living Trust is a Trust you create while you are alive, and in that Trust, you reserve the absolute right to modify or even revoke your Trust at any time. You never lose control! Revocable Living Trusts are very useful in organizing and managing assets while you are alive (even if disabled), and efficiently transferring assets at death without the burden and cost of probate.
If I’m Disabled, can my Family Care for me without a Trust? Many are under the mistaken impression that their spouse or adult children can automatically take over for them in case they become incapacitated. The truth is that in order for others to be able to manage your finances, they must petition a court to declare you legally incompetent so that they can then request the court to appoint them as your legal guardian. This process can be lengthy, costly, and stressful. Even if the court appoints the person you would have chosen, that person must come back to the court every year and show how he or she is spending and investing each and every penny. With a Living Trust, your successor trustee (often a spouse or family member), can immediately “take the wheel”, as it were, and begin caring for you and managing your financial affairs without anycourt involvement or delay.
Can I Avoid Probate Court By Using a Trust? Yes! The Living Trust is a way to manage your property while you are alive and pass it on to your beneficiaries at deathwithout the burden and cost of probate court proceedings. It is essential that while you are alive you “fund” your Trust with your non-retirement assets to effectively avoid probate. To “fund” your Trust means that you, as the creator of the Trust, transfer your assets into the name of the Trust. Our firm is proactive in aiding our clients fund their Trusts.
I've Heard that Only "Rich" People Need a Trust, is that True? No. Contrary to what many people think, a Trust is not just for "rich" people. Individuals and families with very modest estates can benefit from the use of a Revocable Living Trust. In many respects, a Trust can aid individuals and families with modest estate more than even a Will can. This is because a Trust avoids probate at death, and even more significantly, in the event of serious disability, can avoid the expensive, often embarrassing, and burdensome court process of Guardianship.
How Does a Living Trust Work? You work with the estate planning lawyer to design a Trust agreement that names the Trustee and the Beneficiaries and defines everyone’s rights and duties. In that Trust you would stipulate that you retain power to amend or revoke the Trust whenever you want.
Typically, you serve as Trustee of your Trust until you can no longer handle the responsibility, at which time your successor Trustee will take over for you. Your Successor Trustee(s) may be one or more responsible individuals (i.e. children, siblings, other family members), a bank trust department, or an independent trust company. You put property (real estate, securities, cash, etc., but NOT tax-deferred accounts) in the Trust by transferring such assets into the Trust’s name. For example: John Doe, trustee of the John Doe Living Trust.
While you are serving as trustee of your Trust, you have the same amount of control over your assets as you did prior to transferring them to your Trust. If you become disabled and are no longer able to handle your financial affairs, the Successor Trustee is directed to use the income and principal of the Trust to pay your necessary expenses. Upon your death, the Trust assets are distributed to your Beneficiaries in accordance with your directions contained in the Trust Agreement, or the Trust can continue for specified purposes for a period of time, such as protecting your beneficiaries from predators (i.e. divorce, creditors, lawsuits, etc.).
Advantages of the Living Trust. If you want or need to have someone else manage your property and pay your bills in case of illness, the Living Trust is a good arrangement. A poor alternative is a court-supervised guardianship that is more costly and inconvenient and has the disadvantage of disclosing your assets to the public.
If probate avoidance is important to you and a Living Trust is appropriate for your circumstances, keep in mind that all of your probate assets must be in your Trust at the time of your death to accomplish your goal of probate avoidance. You should work closely with your estate planning lawyer to see that the Trust gets "funded" properly. A properly funded Living Trust makes the estate administration process (on your passing) easier for your beneficiaries. Also, trust administration is usually less
Because a Living Trust is not filed in Court during your lifetime or when you die, its provisions are private. This differs from a Will, which must be filed with the Probate Court and becomes a public document.
For more information about Revocable Living Trusts in "Plain English", please click here to select a seminar to attend and register today!
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Vacek & Thain, PLLC serves Texas families with their estate planning, estate tax planning, charitable planning, revocable living trusts, irrevocable trusts, Heritage trusts, wills, power of attorney, family limited partnerships, advanced asset protection planning, declaration of guardian for minor children, healthcare documents, will based estate planning and the hazards of will planning, special needs estate planning, estate administration and trust administration. Contact Vacek & Thain, PLLC if you or your loved ones reside in the Houston, Texas area, including: Katy, Cinco Ranch, Mission Bend, Pecan Grove, Richmond, Rosenberg, Greatwood, Sugar Land, Meadows Place, Bellaire, Fresno, Pearland, South Houston, Spring Valley Village, Pasadena, Clear Lake, Friendswood, and more!
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