Many people believe if they go through all the troubles and hassles of creating a trust for money and property, they are automatically protected and those assets cannot get into the hands of anyone who could potentially sue you. However, unfortunately, this is often not the case. Some trusts do have the capability to protect your assets from claimants and creditors, but for the run-of-the-mill living trusts, protecting assets is not what they are used for. These types of trusts are the most commonly created in estate planning.
What is a trust?
A trust is a type of legal arrangement in which property or assets are held by a third party for one or more other people. Typically, one party holds and manages assets on behalf of another party. Assets can include financial wealth, property, and physical items. This person will authorize another individual, referred to as the trustee, to manage and oversee your estate on behalf of your beneficiaries (the person or people who ultimately receive the property or assets in the trust). Some of the numerous benefits of establishing a trust include:
- Saving on estate taxes
- Possibly avoiding probate
- Preserving disability benefits
- Avoiding succession
- Keeping activity confidential and private
- Managing and protecting assets
- Controlling the distribution of assets
What is the difference between trustor and trustee?
When you consider who is the best Dallas trust lawyer in TX, it should be someone who is responsive to your questions about the trust process and any related legalities. Most people are not familiar with the terms used to describe roles and responsibilities associated with trusts. The difference between the trustee and trustor role include:
- The trustor. Otherwise known as the “grantor,” this is the person who created the trust. In creating the trust, the trustor is also the person who transfers their assets into the trust.
- The trustee. This is the person who the trustor designated to be in charge of the trust. Their role is to oversee the trust and to distribute the assets after the trustor passes away. They are ethically and legally bound to distribute the assets as specified by the trustor. If the trust is a living trust, the trustor must follow the instructions as written by the trustor before he or she became incapacitated.
What do I need to know about the types of trusts?
The following are several types of trusts. They include:
Revocable Living Trusts
These are legal documents that are separate from a will but can work in concert with a will. Generally, a revocable living trust is used to avoid probate. It could also be used when the person establishing the trust has property in multiple states or countries.
Irrevocable Life Insurance Trusts
These types of trusts can be used to move life insurance proceeds outside of an estate. The reason to establish this trust is primarily for tax purposes.
Marital Trusts
Married couples may include a trust in their will for two main reasons: the first being estate taxes, and the second being to protect the property. Marital trusts can ensure that any assets go to the correct person.
Trusts for Minors
These are created for children or grandchildren who are considered minors, as they are under the age of 18 years. The money is often managed by a trustee who ensures that the children get funds for education, healthcare, and other necessary support. Once the children turn a certain age or reach a particular achievement level, they might be able to receive funds from the trust.
Special Needs Trusts
These trusts allow someone to leave their property to a beneficiary who has special needs. This trust may also protect these people who are receiving government benefits while making sure they have extra money to secure the necessities in life.
Spendthrift Trusts
These trusts are most commonly established to protect assets from creditors. Spendthrift trusts can be complicated and can be best explained by a qualified trust lawyer.
What does it mean to contest a trust?
If you believe you have reason to contest a trust, you may be wondering who is the best Dallas, TX trust lawyer. With help from us at Brandy Austin Law Firm, PLLC, you can determine if your argument is valid and might be recognized by a judge. There are various grounds on which a person may base their argument that a trust is not valid. Several of the most common reasons for contesting a trust include:
- The trustor was not of sound mind or body when they established the trust
- The trustor was under the negative influence of someone else and was coerced into establishing the trust or designating which heirs will inherit assets
- The trustee mismanaged the trust
- The trustee stole assets from the trust
- The trustee did not follow the instructions of the trust in the liquidation or distribution of the trust’s assets
What are the benefits of establishing a trust?
When most people hear the word trust fund, they’re likely to think of the beneficiary. Trust fund babies may come to mind. People from wealthy families who have inherited fortunes from their loved ones. However, this is not the only circumstance that can allow for a trust fund. A number of people are utilizing trusts because of the many benefits they may be able to offer.
For those who inquire as to who is the best trust lawyer from Dallas, our team at the Brandy Austin Law Firm, PLLC can show you the answer. Our experienced lawyers equipped with the skills needed to help you determine whether you should set up a trust. For some, setting up a trust may be the appropriate way to distribute your wealth after you have passed away. Trusts can offer a number of benefits not only for you but also for your beneficiaries.
Here are common reasons Dallas area residents should consider setting up a trust as a component to their estate plan:
For a Private Process
Creating a trust is a way of privately passing on your assets to loved ones. This is because in most cases, trusts are not required to pass through probate. Because probate is a public process, the contents of a will may be viewed by any curious party. A trust gives you the ability to leave your wealth to beneficiaries, privately.
Efficiently Transfer Assets
Because a trust does not have to endure the probate process, a beneficiary stands to gain immediate access to the assets you have bequeathed to them. As a result, you may even be able to circumvent some of the expense that can come from enduring probate.
Dictate How Assets Can Be Utilized
A trust can give you some control after you have passed away. Are you hoping to leave money to someone for a specific reason? A trust can give you the opportunity to leave specific directions regarding your wishes.
Avoid Probate
Although a trust is a component to your estate plan, it’s not required to pass through the probate process. As a result, the trust you have set up may be preserved from being contested through probate, and allow beneficiaries to access their inheritance in a timely manner.
What services does your law firm offer?
At Brandy Austin Law Firm, PLLC we believe in providing clients with a variety of support when setting up a trust. If you have ever asked yourself who is the best trust lawyer in TX, then it’s time to meet a member of our legal team. We are well aware of how overwhelming the process of planning a trust can feel. With our help, you can expect to encounter lawyers with experience in handling all variables to setting up a trust. Our services can:
- Provide help with planning your estate
- Help maximize the benefits a trust can deliver
- Support to the person you name as trustee
- Navigate the complexities of complicated estates
- Assist in extracting your wishes and apply them to the trust you are setting up
- Provide attorneys who are experienced in setting up trusts and are patient when you are making important life decisions
- Ensure that your assets are distributed the way you want them
You probably have a pretty good idea of who you would like to inherit your estate. However, figuring out the best way to distribute assets can be especially difficult to do without a professional. With our help, we can efficiently manage the process of setting up a trust in a way that keeps your wishes at the forefront.
Are you considering who is the best TX trust lawyer located in Dallas? If so, we suggest contacting Brandy Austin Law Firm, PLLC, to give yourself the opportunity to create a trust for beneficiaries that encapsulates your wishes. Call us today so that we can help you get started.
Revocable Living Trusts
A revocable living trust is the type of trust Dallas TX trust lawyers may recommend when you decide to create your will and take other steps in estate planning. The main purpose of this trust is to alleviate your family the stress and expenses related to probate after you die.
Avoiding probate is a good goal. Property that you leave to others in a living trust do not need probate court approval in order for it to be passed on to the beneficiaries, unlike property that is left in your will. This means your beneficiaries of the trust do not need to go through a probate court proceeding, which can take between six months and a year and can cost up to about five percent of your estate.
In addition to avoiding probate, there are other benefits of a living trust. If you should ever become incapacitated, your trustee can manage your trust assets. This can be very helpful in an emergency situation or a chronic, serious ailment.
Creditors and Revocable Living Trusts
Revocable living trusts have many benefits, however, protecting your assets against creditors is not one. Even though a trust is a legal entity, you are still in control of your trust assets, which is why your assets can still be accessed by someone with a claim against you.
When you create a revocable living trust, you most likely will name yourself as the trustee. By doing so, you have full access over the assets you put in and out of the trust. Another reason you are seen as the owner of the property in the trust is that because it is revocable, you are able to revoke it at any time. If you decided to revoke the trust, the assets would go back to being in your name.
What Trusts Can Protect Assets?
Although a revocable living trust is not able to protect your assets from creditors, there is an entire industry devoted to protecting your assets. If you put your funds into an irrevocable trust, the money will not be viewed as yours anymore and it will also not be able to be accessed by creditors. People who tend to worry more about having someone file a lawsuit against them sometimes create very complicated trusts with an offshore trustee. They could also set up limited liability companies, which are known as family limited partnerships.
If you are concerned about lawsuits and creditors, there are other methods to protect your funds, such as placing your funds in assets that the state protects from creditors. For instance, you are able to keep money in your retirement plan accounts even if you file for bankruptcy.
If you would like to find out how you and your family could benefit by setting up a trust as part of your estate plan, contact trust lawyer Dallas TX clients recommend from Brandy Austin Law Firm for a free consultation.
What happens when a trust is contested?
When someone creates a trust before they have died, the trust should name specific individuals as beneficiaries and the assets they will receive. However, the terms of a trust may be challenged in probate court by someone who believes the trust is not valid, particularly if they believe it violates state trust laws. If you believe your loved one’s trust is invalid for any reason, you may want to contact a trust lawyer in Dallas, TX. The professionals at Brandy Austin Law Firm, PLLC have years of experience in trust litigation. It is important that your loved one’s true wishes are followed, and if you feel their trust was not what they intended, our team of trust lawyers may discuss your options with you.
Preliminary Issues
To be able to contest a trust, you will have to be one of the beneficiaries of the trust or have to have inherited your loved one’s assets if they died without a trust. The Dallas, TX courts will consider either of those circumstances to have legal standing. It is not uncommon for a trust to include a clause that says any beneficiary who decides to contest the trust will not be able to obtain any inheritance listed for them in the trust (or be penalized in another way).
Reasons to Contest a Trust
In addition to you having legal standing, as listed above, you will need to have evidence of misconduct regarding the trust. The most common reasons a trust is contested are:
- Incapacity: Incapacity could be a reason to the contest the trust if the person who signed it was not mentally sound when creating their trust. The only time the court will take this into consideration is when evaluating the individual’s state of mind when they signed the trust. Their state of mind upon their death — well after they have signed the trust — is not a factor.
- Influence by another: The decedent’s trust could be contested if they were pressured into creating and signing a trust by someone who would benefit from it. There are many ways the deceased could have been pressured. This includes threats, not providing proper medication, or separation from other family members as a means of manipulation.
- Fraud: The trust may be considered invalid if the deceased made the trust based on an intentional misrepresentation or a false statement. For example, if the deceased did not know they were signing a trust at the time, the trust would be invalid. Another instance would be if when the deceased signed their trust, they believed they were providing for a certain beneficiary but in actuality the trust benefitted someone else.
When a trust is contested, the courts will investigate and the trust will be suspended until there has been a final decision regarding its validity. Most importantly, you will need to provide evidence as to why the trust is invalid. Once there is a reasonable amount of evidence provided to the courts, someone in support of the trust may provide evidence that the trust should not be contested.
Contact Brandy Austin Law Firm, PLLC
If you believe your loved one’s best interests are not being met, you may want to contact a trust lawyer Dallas, TX families trust. At Brandy Austin Law Firm, PLLC, we know how important your loved one’s last wishes are, and we work hard to help our clients handle trust creations and disputes.
For more information, contact Brandy Austin Law Firm, PLLC today for a consultation about your case.
