Many trusts exist to ensure your estate planning delivers solutions to protect your assets now and gift them to loved ones and charities when you pass away. For example, you can adopt trusts for favorable tax positions, to make a disabled child’s life more comfortable without compromising their disability benefits, to benefit a spouse or other loved ones, and to maintain your privacy.
Trusts are repositories for your assets as the grantor. A trustee is the person who manages the trust assets, and the people you choose to receive the assets are your beneficiaries. If you have not yet considered trusts as part of your estate planning, our dedicated attorneys at Begum Peláez-Prada PLLC could explain how the different types of trusts in San Antonio could benefit you.
Although there are myriad types of trusts, they are all either revocable or irrevocable. Grantors who deposit assets into revocable trusts can remove or add to them and change beneficiaries at any time during their lifetime. The trust becomes irrevocable at the grantor’s death.
Irrevocable trusts cannot be altered once they are funded and the beneficiaries are named unless all parties agree. Because the irrevocable trust owns the assets, they are not part of the grantor’s taxable estate and are generally shielded from creditors.
Family trusts are any trusts that benefit family members of the grantor. They can be revocable or irrevocable and serve beneficiaries in several different ways. Two common family trusts include the Special Needs Trust and the Qualified Income Trust (QIT).
Special Needs Trusts allow grantors to provide for loved ones who have cognitive or physical disabilities and are receiving Social Security disability benefits—usually including Supplemental Security Income (SSI) and Medicaid for healthcare.
These federal programs, administered by the state, impose income caps on recipients, and leaving them assets in a will can compromise these benefits. A special needs trust allows the recipient to live a more comfortable life without losing benefits.
The QIT—or the Miller Trusts—anticipate a senior’s need for long-term care in a nursing home as they age and cannot care for themselves. QITs are a repository for assets beyond the cap imposed by the federal and state governments, allowing them to qualify for Medicaid, which pays for long-term care.
The trustee can use the funds to purchase community-based services and durable goods such as wheelchairs and walkers. When the grantor dies, the trust’s remainder is usually transferred to the state of Texas.
Our San Antonio managing attorney, Sasha Begum, could discuss how trusts could enhance your estate planning and help you determine the most applicable type.
All trusts are bound by the explicit instructions of the grantor. Each type is highly specific and depends on the unique needs of the grantor:
If you have questions about your succession plans, contact a knowledgeable San Antonio legal professional to discuss types of trusts.
Determining the type of trust in San Antonio you want to adopt is a challenge. You deserve an attorney who can assess your needs, identify ways trusts will benefit you, and then draft and deliver them so they meet your goals.
Come sit down with one of our award-winning attorneys at Begum Peláez-Prada PLLC. It is never too early to protect your assets. We would be honored to guide you on your estate planning journey. Call to schedule a consultation today.
