While some individuals may only require a will-based estate plan, others can benefit from establishing a variety of trusts. Either way, wills and trusts are both essential elements of an estate plan that require the advice and counsel of an experienced attorney.
Located in Fort Worth, Texas, the Law Office of Carey Thompson, P.C. offers comprehensive estate planning services to individuals, couples, and families. By understanding your financial situation and objectives, we will help you design a plan that carries out your wishes and protects your loved ones.
What are the benefits of creating a will?
A Last Will and Testament, or a will, is an important estate planning tool that offers a number of benefits. Nonetheless, many Texans wait until it is too late to create a will. Remember: if you neglect to do so, the probate court will ultimately make decisions about your affairs that may not agree with your wishes.
The main benefit of a will is that you decide how your assets will be managed and distributed to named beneficiaries after your death. Without a will, these decisions will be made according to the state’s intestacy laws, which prioritizes spouses, children, and siblings. In other words, the wrong people may end up with your assets. Additionally, creating a will allows you to name an executor who is tasked with managing your assets and estate affairs after your death.
An executor has a number of important duties, including, but not limited to, carrying out the instructions of the will, paying your debts, filing final income taxes and paying estate taxes, if applicable. For this reason, it is crucial to designate someone who is capable and trustworthy. Without a will, a surviving spouse or another close relative will need to ask the court to be named as the estate administrator.
The final benefit of a will is that you can revise your distribution plan while you are alive and well. In fact, your will should be updated to reflect the changes that may occur during your lifetime, such as getting married, having children, acquiring assets and retiring. Ultimately, you should review your will at least every two years to ensure it reflects these and other changes.
Should my estate plan include trusts?
Many people mistakenly believe that trusts are only for wealthy individuals who wish to pass on significant assets to their loved ones. However, there are a variety of trusts that most people can use to achieve a number of objectives. In short, a trust is an arrangement whereby the person creating the trust (the grantor) authorizes another party (the trustee) to manage the assets for the benefit of the beneficiaries. Trusts can be established for a variety of reasons, such as minimizing estate taxes and providing for the needs of underage beneficiaries, among others. Some common types of trusts include:
Revocable living trusts – Although revocable living trusts are completely separate documents from wills, these estate planning tools are often used in conjunction to fully carry out the decedent’s wishes. Living trusts are particularly well suited for those who wish to avoid probate and minimize estate taxes. Moreover, unlike a will, a trust is not filed in the probate court, so the financial arrangements remain private.
Irrevocable life insurance trusts – While life insurance proceeds are not subject to probate, they are considered to be part of the taxable estate. By creating an irrevocable life insurance trust (ILIT), the trust becomes the owner of the policy and the beneficiary. The proceeds are not taxable and can be used to provide income to surviving loved ones.
Special needs trusts – Special needs trusts (SNTs) are designed to enable a person to leave property to an individual with special needs, many of whom often receive public disability benefits such as SSI. Given that an inheritance could disqualify these individuals from being eligible, SNTs can ensure beneficiaries will preserve their eligibility for needs-based benefits while providing income for their needs that are not contemplated by the public benefit he or she receives.
Charitable Trusts – These trusts are established in order to reduce the grantor’s income and minimize estate taxes by combining gifting with charitable donations. In a charitable remainder trust, for example, property is transferred into a trust and a charity in named as the final beneficiary. Another individual receives income generated by the trust for a set time period, and then the remaining assets are given to the charity.
Spendthrift Trusts – Most trusts can be designated as spendthrift by the grantor. This type of provision keeps a beneficiary from borrowing against trust or trust property.
Wills and Trusts Lawyer Servicing Dallas, Saginaw & Tarrant County
In the end, wills and trusts both play an important role in a well designed estate plan. At the Law Office of Carey Thompson, we work with clients from all walks of life to design highly customized estate plans. We are dedicated to helping our clients achieve their financial goals and preserving their legacies. Call our office today to set up a consultation or complete the contact form on our website.
The Law Office of Carey Thompson, PC provides comprehensive estate planning services to clients in Azle, Blue Mound, Fort Worth, Haslet, Keller, Lake Worth, Newark, Saginaw, and throughout greater Tarrant County.