Trusts

Documents You Absolutely Positively Must Have in Place

Do not take a vacation, leave for college, go through surgery or get on a small plane without having these documents in place and current.  A will.  This document can be simple or complex, but it should not be based on a form that you download from the internet.  Because a will is so important, you should be extremely careful on how it is drafted and executed. Helpful hint: you...

I DON’T HAVE A WILL… SO WHAT? (PART 2)

Not long ago, I published Part 1 of this Article in which I discussed the State of Texas’s rules for how your property is divided if you die without a will. For many people, that division is far from what they want done with their own assets and possessions.  It also causes sticky joint management issues between children from prior relationships (or their parent/the ex-spouse), and current spouses.  That thought...

Dementia – Planning Ahead

According to the National Institute on Aging,  dementia is the loss of cognitive functioning (thinking, remembering, and reasoning) and behavioral abilities to such an extent that it interferes with a person’s daily life and activities. Dementia is more common as people grow older. Up to half of all people age 85 or older may have some form of dementia. As Elder Lawyers, we deal with dementia from a legal perspective. Estate planning...

Forever Remembered: The Ugly Side of Family Trusts

Trust Disputes Tear a Family Apart Picture this: mom and dad know they will leave an inheritance when they die. They want to make sure that the money is spent by their kids wisely and is not frittered away. So they set up a trust. They pick the oldest as trustee, with the second oldest as the next trustee in line. All of the kids are beneficiaries, and even the...

Clearing the Breach – Trust Terms Cannot Help Trustee

Beware the exculpatory clause. These tricky little provisions are often found in trust documents. They purport to give a trustee the ability to avoid all sorts of duties and liabilities. Unfortunately, the clauses often go too far. After all, you can’t relieve a trustee of every responsibility because that would make the trust a sham. You might as well hand the trustee a million dollars without any strings attached. This makes sense...

RAISING YOUR HEMS

How does a Trustee decide when, and how much, money should be distributed to a Trust Beneficiary? Interesting that you should ask. The Trust document usually spells out a distribution standard. These can vary widely, from giving the Trustee unlimited discretion to calling for mandated distributions. The most common standard calls for the Trustee to distribute funds for the beneficiary’s Health, Education, Maintenance, and Support. This is known as the HEMS...

A “Pure Trust” is Pure Hogwash

According to the IRS, a “Pure Trust” is a tax evasion scheme. Often sold as a method for asset protection, a Pure Trust involves the transfer of an ongoing business to a trust. While it gives the appearance that the taxpayer has given up control of the business, the terms provide that the taxpayer, operating as a trustee or a sham entity, still runs the day-to-day activities and controls the business's income stream. Alas,...

What Is A Trust and How Does It Work in 2020? [Updated]

A Trust is a legal chameleon. At its most basic, a Trust is an agreement by a fiduciary (trustee) to hold property for the benefit of another. A Trust is not a separate legal entity. What are the 3 Main Roles In A Trust? There are three players in a Trust: The Settlor - Who establishes and sometimes funds the Trust. The Trustee - Who administers the Trust. Beneficiary - For whose...

Pet Trusts in Texas

Dogs, cats, horses, iguanas, parrots. What will happen to your pets when you die? This is a big issue. Even the Texas Supreme Court has recognized the strong ties between owners and pets. Justice Willett, writing for the Court in Strickland v. Medlen, said  “Over 50% of pet owners say they would rather be stranded on a deserted island with a dog or cat than with a human.... American pets now...

Gun Trusts

By Virginia Hammerle, Attorney   Guns are regulated by a mix of federal and state laws.   Probating an estate that contains guns can be difficult, and could even expose the executor to criminal penalties. The National Firearms Act,  the Gun Control Act of 1968 and, most recently, the Firearm Owners’ Protection Act  outlines gun regulation for certain types of firearms,  such as machine guns, suppressors, short-barreled shotguns (sawed-off shotguns), and destructive devices...

Trusts in Texas

A Trust is a legal chameleon. At its most basic, a Trust is an agreement by a fiduciary (trustee)  to hold property for the benefit of another.  A Trust is not a separate legal entity. There are three players in a Trust – the settler (who establishes and sometimes funds the Trust), the Trustee (who administers the Trust) and the beneficiary (for whose benefit the Trust exists). A Trust should always be...

Texas Trusts

What is a Trust? A trust is an arrangement involving three parties, the trustor, the trustee, and the beneficiary.  The trustor is the creator of the trust who transfers real or personal property to the trustee of the trust.  The trustee holds the transferred assets for the benefit of the third party who is the beneficiary of the trust. The trustee of the trust is a fiduciary.  The trustee has a...
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