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Trust Experience.

Serving the state of Texas, Michalk, Beatty, & Alcozer provides
personal service & attention to each of our clients.

How a living trust can benefit you

As a reasonably well-to-do Texan, your finances probably more than meet your needs and those of your family. However, have you ever considered how setting up a trust could enhance your overall financial situation? If not, here is an overview of how a living trust could benefit you and your family members.

By definition, a living trust is one you establish during your lifetime. The way in which it works is that you place whatever assets you wish into it. Then you appoint yourself as both trustee and beneficiary if you so choose. You can have additional beneficiaries as well, such as your spouse and/or children, and you can appoint a successor trustee who will assume responsibility for managing the trust assets and dispersing them and/or their income to your designated beneficiary or beneficiaries in case you become ill, injured or otherwise disabled or simply do not want to handle these responsibilities yourself.

One of the biggest benefits of a living trust is that you can change any of its provisions any time you desire. You can even revoke it in the future if it no longer serves your needs.

Trust assets

As stated, you can place any asset(s) you wish into your living trust such as the following:

  • Your home
  • Your investment accounts
  • Your retirement accounts
  • Your bank accounts
  • Your real estate investments
  • Your life insurance policies

Once you transfer title of these assets from you to the trust, you need to understand that you no longer own them. Your trust does. Nevertheless, even though your trust holds legal title, you and your other beneficiaries still hold equitable title. What this means is that the beneficiaries receive the trust benefits while you, as designated trustee, disperse those benefits. It is a win-win situation.

Trust benefits

In addition to maintaining complete control of your assets and being able to change and/or revoke your living trust any time you choose, your living trust also provides you the following benefits:

  • You may lower your income taxes substantially.
  • You can choose the termination date of your trust, such as at your death or the death of the last surviving beneficiary. Remember, despite this designated termination date, you can revoke the trust any time during your life.
  • You lower the cost of probate when you die since trust assets do not go through probate.
  • Your living trust is a private document, not a public one like your will. Therefore, your trust maintains your financial privacy.

Pour-over will

Speaking of wills, you may wish to consider drafting a new one to make your living trust work even better. A pour-over will is a simple legal document wherein you instruct your designated executor to collect all assets you own at your death that are not already in your trust and pour them over into it. Your pour-over will thus becomes your catchall document that ensures that all of your assets wind up in your living trust.

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