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There are many types of trusts. Trusts created during the lifetime of the trust-maker, the “Grantor” are referred to as “inter vivos” trusts. Trusts that “spring” into existence at the death of the Trustor are referred to as “testamentary” trusts. Trusts are either “revocable” or “irrevocable.” Revocable trusts are only inter vivos trusts but irrevocable trusts can be inter vivos or testamentary. Estate planners use both types of trusts for many reasons and to address many of the challenges in customizing your estate plan for you and your family’s situation.
Revocable Living Trusts avoid probate and are a must for clients who meet any one of the following criteria:
In Texas, avoiding the costs of probate is not usually a primary reason for creating a revocable trust. In other states, the probate process can be very intimidating and expensive, making it almost mandatory to create a trust to save expenses. In Texas, an independent probate administration is not cost prohibitive, so creating a trust-based estate plan is generally spurred by one or more of the above listed reasons.
If you or a family member may be applying for Medicaid or other federal assistance you will also want to consider a trust.
If you have a revocable living trust from another state you will want to have it reviewed to “Texas-size” it as soon as possible.
Estate planners use irrevocable trusts for many purposes. If properly administered and funded, irrevocable trusts have their own separate legal identity and play a significant role in estate and asset protection planning.
The irrevocable trusts can be drafted…