Goldman Law Group is proud to serve the Steiner Ranch community’s estate planning needs. We offer a range of options to suit various priorities and budgets. We offer will-based estate plans as well as trust-based estate plans. While many people are familiar with wills, we find that many of our clients are less acquainted with the concept of a trust. In this article we will debunk several common myths about trusts and briefly discuss what exactly a trust is.
Myth #1: Trusts are only for the ultra-rich.
Fact: Trusts are a viable option for any family with the desire to help their family avoid formal probate legal proceedings in court after they die, shield assets from creditors, reduce tax liability, or address a variety of other concerns.
Myth #2: Trusts are SO much more expensive than Will-based estate plans.
Fact: In general, trusts do cost more up front, but after considering all the facts, many families decide that the cost is well-justified in terms of time saved, peace of mind, and the avoidance of the hassle and fees associated with probate in the future.
Myth #3: Once I set up a trust, everything is taken care of.
Fact: A trust is similar to a wagon: in order for it to be useful to you, you have to put things into it. We offer customized packages at different service levels to fit your budget and need for assistance to make sure your trust really works when you need it.
So… What Is a Trust?
There are many different types of trusts, and many ways to customize each type. This makes trusts an extremely useful and versatile tool to plan for your family’s future. In general, a trust is a legal creation set up for the benefit of someone or something. For example, some people set up trusts to benefit their children, their grandchildren, or even charities.
It is easiest to understand how trusts work if you think about three separate people being involved. One person, called the grantor, funds the trust somehow, by placing money or other assets into it. Any type of asset may be used, such as money, bank accounts, cars, and even real estate.
The second person, who is known as the trustee, agrees to manage the assets.
The third person, who is known as the beneficiary, receives the benefits of the trust. For example, the benefits might include interest paid on money in the trust, a monthly allowance, or even a place to live.
Although it may seem confusing, a trust can even be set up to benefit the person who puts the assets into the trust. In other words, while there are three roles to be played, each role does not have to be played by separate and distinct people. One person can serve in more than one of the roles.
For instance, a person may place assets into a trust, select someone else to manage those assets, and then receive the benefits himself. To take that example one step further, the person who is both the grantor and the beneficiary could even be the trustee if the circumstances were appropriate.
How a trust is drafted and who plays each of these three roles depends on the goals of the person setting it up.
At Goldman Law Group, our goal is always to help our clients to make informed and empowered decisions. If you need to get a will or trust based estate plan in place or update your existing plan, email info@goldmanlawatx.com to schedule an in-person, virtual, or phone appointment.