Drafting a will has been most prominent among Americans who find value in designating their possessions, or estate, to specific individuals. As of late, however, there has been a shift in preference. Two types of trusts have effectively gained popularity amongst clients, revocable and irrevocable. Most often, clients select a revocable trust for the promise of control, the avoidance of probate, and privacy, while others select irrevocable trusts for financial convenience. Knowing the difference between both will enable you to choose which best suits your estate needs and current situation.
Convenience is king and a revocable trust, or living trust, offer optimal convenience for clients. Revocable trusts are flexible, empowering grantors with control over their assets while alive. If a grantor should wish to make alterations, regarding trustees or beneficiaries, for example, simply filing a trust amendment would realize the request. In addition, because alterations may be made at any time, the trust is considered part of the estate and is subject to taxation. Assets, like the trust, are also subject to state and federal taxation in the event of death, since the grantor receives income from the estate.
An irrevocable trust, unlike its counterpart, is not modifiable and cannot be terminated by the grantor without the consent of the beneficiaries. Additionally, the trust is literally out of your hands, as you resign to all power and ownership of incorporated assets. In the event you assign all assets to the trust, probate fees and estate taxes would cease to apply. Your life insurance may be subject to taxation; therefore, it is vital you establish a separate life insurance trust for protection purposes.
Establish a Trust with an Attorney
The future of your estate lies in preparation. Formulate a trust with a probate attorney for security and peace of mind. An attorney will help guide you through the legal paperwork in a clear and concise manner, incorporating every detail. You work hard for what you have, so protect it with an ironclad trust.
For pertinent legal advice from our trusted probate attorneys, contact Barrera, Sanchez & Assoc., P.C. in McAllen at (956) 287-7555.