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When you begin thinking about estate planning, one of the most significant decisions is whether to establish a trust. A trust is a way to protect your family, control how your assets are managed, and ensure your wishes are carried out. The right trust depends on your goals, your assets, and your family’s needs. Here’s a breakdown of the most common trusts and how they can help you achieve your estate planning priorities in Texas.
Why Trusts Are a Key Part of Estate Planning
A trust is a legal arrangement where you transfer assets to a trustee, who manages them for your chosen beneficiaries. Unlike a will, a trust can start working while you are alive and continue after your death.
Many Texans choose trusts because they:
- Avoid probate, which in Texas can be time-consuming and costly.
- Keep family matters private since trusts don’t go through the public court system.
- Provide more control over when and how heirs receive their inheritance.
- Protect assets from creditors or misuse.
Trusts give you flexibility, but not every trust is right for every situation. The key is matching the type of trust with your specific estate planning goals.
Common Estate Goals and the Right Trust for Each
Protecting Young Children or Dependents
If you want to provide for children who are not yet adults, a testamentary trust or a revocable living trust may be the right fit. These trusts allow you to appoint someone you trust to manage the money until your children reach the age you choose. This ensures financial support without giving minors direct control over large sums.
Avoiding Probate and Maintaining Privacy
If your priority is to save your family from probate delays, a revocable living trust is often the answer. With this type of trust, you can add or remove assets during your lifetime and still retain control. Upon your passing, the assets in the trust are distributed directly to your beneficiaries, thereby bypassing the public probate process in El Paso County courts.
Protecting Assets from Creditors or Long-Term Care Costs
For those worried about future lawsuits, creditors, or nursing home costs, an irrevocable trust can provide strong protection. Once you transfer property into the trust, you no longer own it directly. This makes the assets harder for creditors to reach and may help with Medicaid planning for long-term care. However, because irrevocable trusts cannot easily be changed, it’s essential to weigh the decision carefully.
Supporting a Loved One With Special Needs
If you have a child or relative with a disability, a special needs trust allows you to provide financial support without jeopardizing eligibility for government benefits such as SSI or Medicaid. The trust pays for supplemental needs—like education, transportation, or personal care—while preserving access to public assistance.
Leaving a Charitable Legacy
If leaving a legacy through charitable donations is one of your goals, a charitable remainder trust or charitable lead trust may be the right choice. These trusts allow you to provide income for yourself or your family while also supporting a favorite charity. Charitable trusts can also provide tax benefits under both federal and Texas law.
How to Choose the Right Trust
Before deciding on a trust, consider:
- Family structure: Do you have young children, a blended family, or a loved one with special needs?
- Type of assets: Real estate, retirement accounts, and small businesses may all require different planning tools.
- Long-term care concerns: If you anticipate needing nursing home care, planning ahead with the right trust is critical.
- Taxes: Some trusts offer tax advantages that may help preserve wealth for your heirs.
Because trusts are complex and must be drafted correctly to work as intended, it’s essential to get legal guidance before making decisions.
FAQs About Trusts
Do I need a trust if I already have a will in Texas?
A will is important, but it does not avoid probate. A trust can work alongside your will to ensure your assets are transferred smoothly and privately.
Can I change or revoke a trust later?
Yes—if you set up a revocable trust. Irrevocable trusts, on the other hand, generally cannot be changed once created.
What happens if I don’t set up any trust?
Without a trust, your estate may go through probate, and distribution of your assets will follow Texas intestacy laws if you don’t have a will.
Contact Our El Paso Trusts and Estates Attorneys Today
The right trust depends on what you want to achieve for yourself and your loved ones. Whether you are hoping to protect your children, shield assets, or support a family member with special needs, there is a trust designed to fit that purpose.
At the Law Office of Carey Thompson, PC, we work with families in El Paso and throughout Texas to create personalized estate plans that reflect their unique goals and objectives. Contact us today to schedule a consultation and take the next step in protecting your future.