By the Estate Planning Attorneys at Smith & Garg, LLC, serving The Woodlands, Spring, Houston, Conroe, Humble, Kingwood, Tomball, Cypress, Huntsville, Westchase, Southwest, Sugar Land, West Oaks, Alief, Memorial, River Oaks, Stafford, Katy, and Missouri City.

TRUSTS

A “trust” is simply a special arrangement for holding, managing and distributing property. The term refers to a legal relationship in which one person or trust company (a “trustee”) holds property for the benefit of himself or another person (a “beneficiary”). The person creating the trust is often called the “grantor” of the trust. The trustee receives legal title to the property transferred into the trust, and manages it according to the grantor’s wishes. That trustee will be held legally accountable to the trust beneficiaries, meaning that the post of trustee is a fiduciary position which must be undertaken prudently and responsibly to ensure the trust assets ultimately benefit the beneficiaries in accordance with the grantor’s wishes.

A trust offers its creator a great deal of control. The Grantor (creator of the trust) will have substantial flexibility in deciding what happens to property placed in the trust, both during his or her lifetime and following his or her death. Specific benefits to this legal arrangement include the ability to provide for a beneficiary’s special needs; the ability to keep trust property in a family’s bloodline; the ability to transfer wealth privately rather than publicly; the ability to reduce or eliminate federal wealth transfer taxes through proper planning; the ability to plan for a second marriage situation; and the ability to include “spendthrift” provisions to protect trust property from creditor actions.

A grantor will have wide latitude to create a trust for any purpose, as long as that purpose is not illegal. Thus while the grantor is allowed substantial freedom to implement terms to carry out his or her estate planning, tax planning or other wishes, the provisions of the trust can’t require the trustee to commit a crime or a tortuous act, nor any other act that is against public policy.

A trust can be revoked as long as it was not made irrevocable by its terms. In other words, a trust may be modified or amended as long as it is a revocable trust according to the trust instrument. The trust grantor, however, may not make a change to his or her trust that will place more duties and responsibilities on the trustee without the trustee giving consent. Any changes or amendments to a revocable trust must be made in writing.

There are a myriad of reasons for creating a trust, ranging from accomplishing sophisticated tax-planning goals to the simple postponement of a child receiving his inheritance. Whether you are curious as to whether a trust would benefit your estate plan, you are securely interested in creating and funding a trust during your lifetime or within your Will, or you have already created a trust, the Estate Planning attorneys at Smith & Garg encourage you to meet with us to discuss your circumstances and legal options. We are here to guide you with respect to all facets of trust planning, whether you need trust creation, modification, interpretation, or simply answers to trust-related questions.

Call Smith and Garg today at 281.210.0010 or complete our Contact Form and let us assist you with your wills and trusts.