Trusts can provide a powerful tool for people in Texas who want to protect their assets for generations to come. When planning for the future of your assets, you may want to provide for your children and other loved ones. The goal is to keep as much wealth as possible for your beneficiaries rather than losing it to estate taxes or other external forces like creditors, lawsuits or potential divorce settlements. There are several ways estate owners can make use of the versatile characteristics of trusts to help protect their wealth for generations to come.
Trust protectors for children
Many people prefer to create trusts because they allow the vast majority of wealth to pass on without dealing with the probate process. Trusts provide a greater sense of control, flexibility and privacy that is important to many families. If you’re creating a living trust, you may want to name your child or another beneficiary as a successor trustee. This can be a helpful and convenient approach, but you may also want to build in trust protectors to help shield your assets in the case of a divorce, lawsuit or creditor concerns. A trust protector can provide for a sibling or other named individual to take over as trustee in case of a threat to the assets in the trust.
Reducing or eliminating estate taxes
The estate tax exemption per person rose dramatically in 2018, reaching $11.18 million per person and double that amount for married couples. Still, that enhanced exemption is scheduled to sunset in 2025, and you may have assets above the exemption level. Certain types of trusts, like dynasty trusts, can help to keep family wealth protected over generations without losing large portions of it to estate taxes. The trust could be structured to provide family access without risking the trusts to taxes or creditors.
If you’re thinking about how to provide for your family in the future, there are many different kinds of trusts that may help you to achieve your goals. An estate planning attorney may offer advice and guidance to prepare key estate documents to protect your assets.