The process of planning for the future is very personal and varies for each person since one usually bases it on their choices on requirements, ambitions, and objectives. No one estate planning strategy works for everyone, so learning how to create a plan that is important to you and useful for many years to come can be beneficial. The first step is choosing the tools that will work best for you and complement your current estate plan. Consult an attorney today to get help with your estate planning.
Why is the inclusion of trust important?
There are many reasons why including a trust during estate planning is a good idea. In Texas, many people find including trust in their estate planning to be a wise move because it enables you to set aside assets and dedicate them to a purpose.
Trusts a categorized into two main categories: revocable and irrevocable. Understanding the distinctions between these two choices is crucial because they impact how much control you have over the trust’s assets.
Revocable trusts, sometimes known as living trusts, are preferred because their owners have the option to alter their terms at any moment, and this entails that they have the authority to change beneficiary designations, alter guidelines for the use of trust funds, and more. Although this type of trust is more adaptable, the assets kept in the trust are difficult to shield from creditors’ claims. However, if and when the trust’s owner passes away, estate taxes may also apply to trust assets.
On the other hand, an irrevocable trust, cannot be changed once made. The fact that this kind of trust protects against tax penalties upon the owner’s passing is one of the main factors why people prefer it. Irrevocable trust beneficiaries are shielded from tax penalties for any income produced by the trust assets. Those who might work in fields that carry a significant risk of lawsuits typically choose this trust.
The perfect estate plan is one that is made according to your needs and estate goals. You might need to consult an attorney who can provide insight into the best estate planning options for your particular scenario. Moreover, they can help you understand which one between a revocable or irrevocable trust might be the best complement to your estate plan.