The value of estate planning is highly beneficial for Texas residents who plan to leave a legacy for their loved ones. Estate plans help with asset distribution and guardianship of minor children, disabled dependents, and pets.
Estate plans vary based on types, such as a will, a trust fund, medical and legal powers of attorney, special needs trusts, family partnership trusts, and more. Estate plans have tools that help you decide which one or more suits your needs and best executes your wishes. Estate plans help lessen family conflicts and lower court expenses from extended probate.
Estate plan trusts
Estate plan trusts are funds set aside for specific purposes. An administrator or manager will execute the distribution according to your wishes and under the laws of your state. Here’s a brief description of different trusts:
- Revocable Living Trust: Allows you to transfer assets to a trust while alive.
This trust helps reduce the need for probate.
- Irrevocable Trust: Cannot be modified or revoked except in special
circumstances decided by a probate judge. Its purpose is to manage estate
taxes, asset protection, and caring for special needs beneficiaries.
- Charitable Remainder Trust: Allows charitable donations and a constant income
stream while you’re still alive. Your final wishes for distribution continue
after death. This trust allows and offers tax benefits for your contributions.
- Life Insurance Trust: This irrevocable trust holds a life insurance policy on
your life, different from a procedure. At the time of your death, the trust receives and
distributes the proceeds according to the trust terms. It also saves on taxes
and can cover estate costs.
Asset management estate planning
Estate planning is a financial tool that relieves the burden of asset distribution on your loved ones. A written plan that explains your wishes allows your family to focus on sentimental matters that bring joy to your legacy.