Category: Trust Planning

What Are the Advantages of A Retirement Trust?

Saving for retirement is often a delicate topic for many people. Whether they are worried about when to save, how much to save, or how to save, this is one topic that often has many people perplexed about their future. However, today, more and more people are turning to individual retirement trusts as a way to plan for their future. It has specific tax advantages, and long-term control benefits than many other retirement options, which can help you and your financial future.

How Does it Work?

Simply put, a trust is an estate planning tool that lets you set aside funds for certain beneficiaries to receive in the future. They can be managed by a third party, known as a trustee both during your lifetime and after your death.

An IRA, which is the most common retirement saving plan, prepare you for retirement and provide tax advantages until you are 70 ½ and need to start taking distributions from the account.

When these two come together in an individual retirement trust, you can enjoy the tax advantages with an IRA and the long-term control that comes with a trust. It allows you to bypass many of the complex IRS requirements and helps protect your legacy from asset seizure in the future.

How Do I Set Up a Retirement Trust?

The best way to set up a retirement trust is by meeting with an attorney that specializes in estate planning. While many individuals are able to take advantage of the unique benefits of retirement trusts, they aren’t necessarily for everyone. In most situations, individuals who have significant retirement assets, are tax-sensitive, have been divorced and remarried and those with blended families all find unique perks of retirement trusts.

An attorney will be able to go through your individual situation and make sure you have a trust put in place that not only benefits you but any trustees you may have as well. Since every situation and every individual is different, the insight from an estate-planning attorney is necessary if you want to make sure you are making the right decision for you and your family.

When planning for your future, the best thing you can do is rely on the expertise of estate planning to make certain that you are not only making smart financial decisions for your present situation but that you are setting up your beneficiaries even after you pass. Since trusts can be manipulated to fit your individual needs, together with an estate planning attorney, you can set up specific trusts that meet your requirements for today and your plans for the future.

Proper estate planning can ensure you will stay financially sound well into your retirement while you still maintain some control over how your heirs are receiving their inheritance, even after you are gone.

If you have questions about individual retirement trusts, you need to consult a professional attorney for more advice. Call the experts at Hegwood Law Group a call at (218) 218-0880, for all of your estate planning needs.

Be Organized and Ready When Meeting With Your Houston Trust and Estates Attorney

Estate planning does not have to be a long, complicated process. Before you meet with a Houston Trust and Estates attorney there are certain documents you may want to bring with you.  Having these documents with you at your initial meeting can greatly simplify the process.

First, you will want to create a list of all your assets and liabilities. Everyone will need to do this at some point during the estate planning process and the sooner you get this completed, the sooner your estate plan will be finalized. If there is something you forget it to list, it is not the end of the world and your Houston estate lawyer will recognize the error. Here are some common assets and liabilities you will want to include:

  • Any bank accounts. Having recent statements is a great way to go.
  • Investment accounts
  • Stocks and bonds
  • Life insurance and Annuity policies
  • Deeds for properties you own
  • Retirement plans
  • Business partnerships or LLC interests
  • Money owed to you
  • Personal effects
  • Loans and credit

You will also want to determine who will inherit your estate. A Houston Trust and Estates attorney can help you narrow down candidates, but at the end of the day those decisions will be made by you. If there are certain items or properties that you want a specific person to receive, let your estate lawyer know. Also, if you have someone in mind to act as the executor, guardian for minor children, or medical power of attorney, let your Houston estate lawyer know so they can begin creating those legal documents.

By doing these things in advance, you will have a great head start. The result is a more streamlined process and a stronger sense of control over the planning of your estate. Both you and your lawyer will benefit from from clear, concise communication. To set up your consultation today please call the Hegwood Law Group at (281) 218-0880.

Who Needs to Consider Trusts for their Children in Houston?

There are a lot of reasons to consider setting up trusts for your children, but trust and estates lawyers in Houston see far too many cases where this just is not done.  One of the biggest reasons for not setting up a trust could be that you feel you do not have enough assets to warrant one.  We hear about “trust fund babies” and automatically think of the super wealthy, not regular folks like ourselves.

Really, though, even those in the middle class should be thinking about setting up trusts for their children.  Even if you do not have a lot of extra money lying around, you have other assets that can quickly add up in value.  Add to that the payout from a life insurance policy, and you suddenly realize that you have quite a bit of financial worth that might be left behind to children who are not ready to handle it.  Anything more than about $100,000 is reasonable to consider putting into a trust for children.

What Does the Trust Do?

When you set up a trust with your trust and estates lawyer in Houston, you will discover that there are many different ways to use this tool.  One of the most important benefits of a trust is that it allows you to stipulate how your children will use the money you leave behind.  If your intention is for your kids to use the money for college, but they want to use it to buy a sports car instead, what is to stop them?

In your case, the trust is what can stop them.  You can implement restrictions on how the money is spent.  You can, for example, determine that the funds in the trust are designated for specific functions, such as paying for education or day-to-day expenses.  In some cases, there is a designated adult to help keep things on track, although this person must be chosen wisely.  In other cases, the parent sets age limits on the trust, assuring that the children do not have access to the money until they have more time to mature.

Protecting the Trust

Another reason to consider a trust is to protect your children’s money from misuse by the adult in charge of the funds.  In the case of a “custodial” account, the person in charge can have a lot more say in how the money is spent.  This could translate into frivolous expenses, including paying himself or herself an unrealistic amount to “manage” the funds.  With a trust, however, the person in charge (the “trustee”) is held more accountable and is required to follow your wishes.

If the trustee does manage the funds poorly, it is also possible that your child would have some legal recourse, as the trust is a legal contract.

Talk to a Houston Trust and Estates Lawyer

The best way to determine if a trust is right for you and family is to talk to a Houston trust and estates lawyer.  Our attorneys are available to sit down with you to review your estate plan and consider how a trust or other estate planning tools can best meet your needs.  To schedule a planning session, call us at (281) 218-0880 and mention this article.

Trust Lawyer in Houston Answers, “What is a Trustee?”

When you work with a trust lawyer in Houston to set up a trust, you will be asked to name a trustee. Before you can select someone for this important job, you need to fully understand the role and responsibilities this person will be given.

A trustee is the person who will manage the assets that are in your trust. Many people choose to be their own trustee and can continue to manage their affairs as normal. Married couples can be named co-trustees. In that case, when one dies, the other can continue to make financial decisions without any other legal steps needed.

You can also name a successor trustee. A successor trustee is the person who will take over your decision-making if you (or the co-trustee) are no longer able to do so. In some cases, several successor trustees are named in case the previous one is unable to serve. In other cases, people choose to select two or more adult children who will act together. Some people choose a completely unbiased corporate trustee, usually a bank or trust company, who will take over decision-making.

The following list contains some of the responsibilities that are required of a trustee:

  • Make decisions regarding assets in your trust. This typically involves managing the trust investments, property and making decisions that are in the best interest of the trust beneficiaries. Assets must also be managed according to the terms of the trust and governing law.
  • Keep detailed records for all of the trust transactions.  All transactions need to be accounted for by maintaining a record of receipts and other documentation.
  • Comply with all federal and state law requirements. It is critical that a trustee follows the terms of the trust documents and the trust creator’s instructions. Additionally, a trustee is responsible for complying with federal and state laws, meeting any reporting requirements, and filing federal and state taxes.

Administering a trust is often complicated and confusing. The trustee not only has to manage the details of the trust, they are also dealing with emotions and conflicts that can arise among the beneficiaries of the trust. That is why many trustees contact us to assist. We can help you avoid all of this by walking you through the entire trust administration process. Doing so will relieve you of tremendous stress and might help you avoid litigation brought on by unhappy beneficiaries.