McKinney Trust Attorney

As estate planning tools, trusts can serve a number of different purposes. Along with providing flexibility to structure charitable gifts and inheritances, chief among these purposes is avoiding the probate process. Instead of probate, trust assets are distributed through a process known as trust administration. At The Nordhaus Firm, each McKinney trust attorney has extensive experience creating trusts tailored to achieve clients’ specific goals, as well as representing clients during both probate and trust administration in Collin County, Texas.

If you want to explore the benefits a trust can provide, we can review your priorities and explain your options, including the investment in resources to establish the trust and the administrative duties that would be required in the future. If you have been named as a trustee or beneficiary in a trust, we can help you understand the terms of the trust and what they mean for your obligations or legal rights. Although trust administration for a revocable trust is generally less expensive and more straightforward than probate, it is still a legal process that must be carefully followed and understood in order to avoid creating conflicts or running into issues down the line. Administration of irrevocable trusts can be quite complex and often requires compliance with state and federal regulations, as well as the terms of the trust agreement.

How a Trust Operates

A trust is a legal arrangement set up to hold property for the use of one or more people known as beneficiaries. Some people find it helpful to think of a trust as a large container like a bucket. You can put all types of property into a trust, including bank accounts, real estate, vehicles, and personal property. But a trust starts out empty, and you have to transfer assets into it to fund it.

Once property is placed in a trust, it is controlled by a trustee. A trustee is like a manager. The trustee has a specific duty to act in the best interests of the beneficiaries rather than the trustee’s own benefit. The trustee will oversee the assets to ensure that they maintain their value and distribute assets to the beneficiary according to the terms of the trust agreement. For instance, if a trust was created to pay for educational expenses, the trustee might send tuition payments to the beneficiary’s school and reimburse the beneficiary for books and other educational expenses.

The person who created the trust and transferred the property generally loses ownership and control of the trust property. However, with a revocable trust, the creator of the trust also usually serves as the primary trustee and primary beneficiary, so they maintain control and use of the trust property.

Trusts Can Be Revocable or Irrevocable

When a trust is revocable, the creator can easily make changes or even cancel it at any time as long as they remain legally competent. This type of trust is often used to pass property outside the probate process. Because of its revocable nature, property in the trust is still considered to belong to the trust creator for many purposes, and the creator can remove property from the trust if they want.

By contrast, once property is put into an irrevocable trust, it can usually only be removed by the trustee to fulfill the purposes of the trust. This type of trust protects the assets inside because of its inflexible nature. Property is considered to belong to the trust itself, so creditors of the creator or beneficiary cannot reach it. Moreover, since the property does not belong to the trust creator or beneficiary, it is not counted against them for purposes such as establishing eligibility for Medicaid long-term care benefits or determining estate tax liability.

At The Nordhaus Firm, we can create the right trust to serve your needs with terms designed to your specifications. We can also incorporate a testamentary trust into your will that would only take effect after your death when the will is admitted to probate.

Representation for Trustees

While trusts do not need to be filed in court, trustees nonetheless have a number of important obligations. Since trustees can be held liable if they mismanage trust assets or otherwise fail to satisfy their responsibilities, as a trustee, it is essential to make sure you have a clear understanding of what you need to do. At The Nordhaus Firm, we assist trustees in all aspects of trust administration, including:

• Creating inventories and preparing accountings of trust assets
• Paying the expenses of trust administration
• Distributing trust assets to beneficiaries
• Satisfying trustees’ fiduciary duties

A McKinney Trust Attorney Can Also Provide Representation for Beneficiaries

If you have been named as a beneficiary in a trust, our trust lawyers can help make sure you receive the assets to which you are legally entitled. In some cases, trusts can be decades old, and with certain types of trusts (such as revocable trusts), assets can flow in and out for years before the settlor’s death. These and other circumstances can often make it difficult to understand the settlor’s intent, and in many cases, it takes the knowledge and insight of an experienced estate planning attorney to accurately identify trust assets and clarify beneficiaries’ rights.

If you are concerned that a trustee may be misappropriating trust assets or mismanaging the trust administration process, a McKinney trust attorney from our firm can assist you in seeking to enforce the trustee’s fiduciary responsibilities as well. These can often be sensitive matters, particularly when the trustee is a family member. We can approach the situation delicately, if necessary, and we can use various tools and techniques to seek to resolve any disputes as amicably as possible.

Drafting Your Trust in McKinney

Trusts are custom documents prepared for your specific needs. If you want to avoid probate, a McKinney trust attorney can set up your trust to be revocable, so you can easily change it, cancel it, or remove property from it. However, some types of trusts must be set up as irrevocable—unchangeable—in order to meet legal requirements. For instance, a trust must be irrevocable if you want to use it to preserve government benefits for an individual with special needs or if you are setting up a trust to protect assets from creditors or establish eligibility for Medicaid long-term care benefits.

Wills vs. Trusts in McKinney

If you pass property to loved ones through a will, the will must be filed in probate court and approved before the executor can begin paying bills and settling your estate. If you pass your property through a revocable trust instead, the successor trustee can begin handling bills and distributing funds much sooner without court approval.

A trust can also enable your successor trustee to manage your affairs easily if you become incapacitated. However, you cannot designate a guardian for minor children in a trust as you can in a will. For many people, the ideal arrangement is to establish a trust as the primary tool and create a pour-over will as a backup to cover any property accidentally left out of the trust.

Advantages of a Trust

Trusts can be created in different ways to provide various benefits, so they are an increasingly popular tool in the estate plans of people of all means. Certain trusts provide a level of protection that insulates property from lawsuits and other forms of depletion. Other trusts preserve access to government benefits while conserving resources. The most popular trusts are revocable trusts set up to bypass the delays and expense of the probate process. Trusts allow for privacy in property management and transitions.

Speak with a McKinney Trust Attorney to Answer All of Your Questions

We provide experienced legal representation for trustees and beneficiaries in all matters related to trust administration in Texas. If you have questions about the trust administration process or need legal representation with respect to administering a trust, our estate planning attorneys are here to help. To get started with a free initial consultation with a McKinney trust attorney, please call our offices at 214-726-1450 or submit a request online today.

While our primary office is located in McKinney, Texas, The Nordhaus Firm provides legal representation to residents in the Allen, Frisco, Prosper, and entire Collin County area.

Frequently Asked Questions

What are Trusts?

Trusts are legal entities set up to hold property. Assets in a trust are managed by the trustee for the use of the beneficiary. For many purposes, a trust is considered the owner of the property, although, with a revocable trust, aspects of ownership such as tax liability can be attributed to the trustee.

What is the cost of a trust in Texas?

The cost of setting up and administering a trust depends largely on the complexity of the trust and can vary widely. A McKinney trust attorney might charge as $1,500-$2,000 to create a revocable trust to avoid probate for a single individual, while the cost of irrevocable trusts designed to reduce tax liability or fulfill other purposes can be considerably higher. The cost of a testamentary trust will be incorporated into the cost of creating a will.

What assets should not be in a trust in Texas?

Assets that should not be transferred into a trust include retirement accounts, medical savings accounts, and accounts set up for minor children. Generally, assets that pass through a beneficiary or payable on death clause do not need to be placed in a trust. Your McKinney trust attorney can review your assets to help you determine which ones to transfer into your trust.

What are the disadvantages of a trust?

Once property is transferred into an irrevocable trust, it cannot be removed, and the terms of the trust may be difficult to change, so there is a finality to some trust arrangements that must be considered. There are also expenses and duties associated with establishing and maintaining a trust.

What is the downside of a living trust?

A living trust only works as designed if the grantor takes the rights to transfer assets into the trust, so setting up a trust does require some follow up work.