Trusts in Texas, when appropriately managed, can provide a variety of benefits, including asset protection, reductions in estate taxes, income tax management, asset management, and more. A person will often create a trust that contains assets of great importance they would like to protect and hand down to future generations. The Law Office of Annabel Moore has extensive experience in forming trusts and in trust administration, which allows us to guide trustees and beneficiaries in the position of overseeing those assets.
Types of Trusts
There are many different types of trusts that can be set up for different purposes. Trusts hold titles to assets for beneficiaries named therein. Trusts are a valuable planning tool and can help direct assets to a variety of people or organizations. Trusts are customizable and our legal team will work with you to set up a trust that meets you and your family’s needs.
Common types of trusts our clients often choose:
- Revocable Living Trusts – Trusts established to manage assets while you are living and control the distribution of those assets after you pass.
- Irrevocable Trusts – Trusts designed to protect assets from creditors, give gifts to future generations of your family, etc.
- Testamentary Trusts – Trusts included in a Will, typically used to protect assets from the creditors of future generations, avoid estate taxes, and protect family members.
- Special Needs Trusts – Trusts created to finance care for disabled adult children or other vulnerable family members.
- Charitable Trusts – Trusts created by clients who would like to donate financially to a specific charity or charities for years to come.
When a loved one passes away, assets that are set aside in a trust are treated differently than personal assets. Assets held in a trust can bypass the probate process and pass directly to the designated beneficiaries.
Trust Administration
After the person who created the trust passes away, the appointed trustee must now administer the trust. Basically, the trustee is now responsible for managing the assets listed in the trust and distributing them according to the legal document. The legal process of settling the trust and distributing the assets is called trust administration. This process is complicated and has many steps that must be followed to the letter.
A trustee is considered a fiduciary and has many duties, as well as an ethical obligation to protect the assets listed in the trust and the interests of the beneficiaries. Because of this heightened legal responsibility and the stringent ethical standard that must be adhered to, it is not recommended to undertake these responsibilities alone. Having a knowledgeable trust administration attorney by your side will help you through this technical legal process. Trust administration can include settling estate debts, paying taxes, transferring property titles, and other administrative duties necessary to settle the estate of the deceased. A trustee’s basic duties include collecting, managing, investing, and distributing trust assets. The trustee must also keep very detailed accounting records, an inventory, and obtain any required appraisals. The trustee must also be mindful of how assets in the trust are titled. The title of each asset determines ownership of that asset.
Depending on the type of trust and how it’s structured, trust administration may be a one-time process or could require future action and ongoing consideration for years to come. Trust administration often requires a trustee to prepare a federal estate tax return, an income tax return, and a fiduciary tax return.
Our legal team is prepared to advise trustees regarding:
- Managing trust investments and accounts
- Asset distributions – lump sum or annual – as dictated by the trust documents
- Stipulated inheritances
- Spendthrift provisions
- Filing federal income tax returns
- Accounting and reporting requirements
- Reporting to trust beneficiaries
Trust administration must always be performed according to the documents prepared by the creator of the trust. The role of trustee may be incredibly time-consuming but you do not have to take on this role alone. Our legal team can provide guidance or complete trust management services depending on your comfort level and available time to commit to the process. We are also able to provide ongoing trust management for a trust with years of administration ahead.
Friendswood Trust Administration Law Firm
The Law Office of Annabel Moore provides counsel to trustees in the Friendswood area. Our team can help you efficiently fulfill your trust administration duties while following all required state and federal laws. We know trust administration can be a complicated legal process. We can prevent legal trouble and help resolve conflicts with family members. No matter what type of trust you are administering, we will help you every step of the way. Contact the Law Office of Annabel more today to arrange a consultation.