Texas Irrevocable Trust Attorney

Guarding your legacy against the unforeseen

When creating your estate plan, the idea of not being able to change how your assets get managed may seem frightening. But some circumstances warrant additional consideration—for many Texas families creating an irrevocable trust can help them safeguard their assets and protect the goals they have for their legacy.

If you’re interested in exploring your estate planning options, including creating an irrevocable trust, our attorneys at SMCE ESQ PLLC are here to help.

We prioritize lifelong relationships with our clients. We work closely with you to identify your goals for your estate and help you select the right options for you and your family. Contact us to start a conversation today.

What is an Irrevocable Trust?

Irrevocable trusts are a specific type of trust that have many functions.  A simple definition of a trust is that it’s a separate legal entity you create to manage assets you put into it. These popular estate planning features can potentially maximize the benefit of the entrusted property for your beneficiaries, shielding them from burdensome tax situations.

Trusts also serve as a control to ensure that assets get used according to your wishes. This includes situations where you may be incapacitated or unable to make decisions independently.

Irrevocable trusts mean much what their name suggests—they can’t be changed. Once you add assets, removing them is extremely difficult. In Texas, modification and revocation are possible, but your beneficiaries must agree to the change or get a court involved.

Why an Irrevocable Trust is Important

You’ve worked hard for the assets and finances you earned. More importantly, you want to ensure your loved ones will benefit from these assets when you are gone. The last thing you want to worry about is your estate being jeopardized by creditors, spendthrift relatives, or other unforeseen circumstances.

Families have many reasons for creating this type of trust but often do so for the following benefits:

Controlled Asset Distribution

While it may be tempting to gift money or real estate to your family members, beneficiaries who aren’t financially responsible could squander their financial legacy. A trust allows you to precisely determine the conditions and amounts for distributions of their inheritance.

Controlled Asset Distribution

While it may be tempting to gift money or real estate to your family members, beneficiaries who aren’t financially responsible could squander their financial legacy. A trust allows you to precisely determine the conditions and amounts for distributions of their inheritance.

Medicaid and VA Eligibility and Asset Protection

Irrevocable trusts are a vital element in long-term care planning. Medicaid and the VA assistance programs won’t treat your assets as countable when they’re part of this trust because you no longer own them. Additionally, any remaining funds will go to your beneficiaries, not the state recovery process upon death.

Estate Tax Benefits

Placing assets in an irrevocable trust removes you as the owner, which translates into significant tax savings. If the trust is your beneficiary, your spouse won’t be liable for federal estate taxes for this property when you pass away.

Estate Tax Benefits

Placing assets in an irrevocable trust removes you as the owner, which translates into significant tax savings. If the trust is your beneficiary, your spouse won’t be liable for federal estate taxes for this property when you pass away.

Protection from Creditor Claims

Regardless if you or your beneficiaries are burdened with debt, these trusts can function as a shield against collection attempts against your estate. This is because the assets it holds are no longer yours.

Creating an irrevocable trust can make the difference in providing a financial support system for your loved ones that lasts a lifetime or just a few short years. Contact the estate planning attorneys of Shann M. Chaudhry, Esq. Attorney, PLLC to determine if an irrevocable trust is right for you.

How Does an Irrevocable Trust Work in Texas?

The simplest explanation of how an irrevocable trust works is that it can take assets out of your estate, and a Trustee controls how your assets are classified and distributed to your heirs (pursuant to the terms of the trust agreement). Unlike a revocable trust (living trust), it’s challenging, if not impossible, to modify or revoke the terms you set. The finality of this option helps prevent abuse and/or the sale of your assets by others facing financial issues.

How an Elder Law Attorney Can Help Set up an Irrevocable Trust For You

The permanent nature of an irrevocable trust can make setting one up a complex process. You want to ensure your directives are clear and have the intended consequences for your loved ones. Serious mistakes can occur when drafting trust agreements, including:

Choosing an unreliable trustee

Using vague distribution language

Failing to specify what happens if a beneficiary passes away or remarries

Not naming a successor trustee

Tax implications are another serious matter to consider when creating an irrevocable trust to hold your assets.

Estate taxes are rarely an issue for these agreements, but there are some potential liabilities depending on how much you place into the trust at once. The Texas estate planning attorneys of SMCE ESQ PLLC are well-versed in trust law and exemption limits to help you avoid this risk.

Our Approach to Irrevocable Trusts

Estate planning is an ongoing process. As you reach new milestones in your lifetime, it’s important that your plan represents your wishes and can be enacted as you intended.

Don’t risk going it alone when planning your estate and miss your opportunity to take advantage of all your legal options. The law firm of Shann M. Chaudhry, ESQ. Attorney at Law, PLLC, is here to help you to understand the legal options for protecting your estate.

Don’t risk going it alone when planning your estate and miss your opportunity to take advantage of all your legal options. The law firm of Shann M. Chaudhry, ESQ. Attorney at Law, PLLC, is here to help you to understand the legal options for protecting your estate.

We care about your future and will help you make informed decisions. We work closely with clients to maximize the benefits of their estate plans so they can leave behind the legacy they want. Our years of experience practicing elder and estate law in Texas makes our law firm uniquely qualified to assist in creating the trust documents you need.

From irrevocable life insurance trusts (ILITs) to Medicaid Asset Protection and charitable trusts, we provide families in the San Antonio and Austin, TX areas a personalized experience for creating their estate plans.

Speak With a Texas Irrevocable Trust Attorney

The estate planning attorneys at Shann M. Chaudhry Esq., Attorney at Law PLLC, takes great satisfaction in helping Texas individuals and families create estate plans that protect their needs and those of their loved ones.

Our firm practices estate law thoughtfully and compassionately, providing our clients with a comprehensive planning experience that helps secure their families’ financial future.

We welcome you to contact our experienced legal team to receive sound advice and guidance regarding estate planning in Texas.

Irrevocable Trust FAQs

What Is the Difference Between a Revocable and Irrevocable Trust?

A revocable trust allows you to create a modifiable agreement that you can revoke at any time. An irrevocable trust is the opposite. Once set up, you can no longer make any changes to the assets or agreement except under very limited circumstances.

What Kinds of Irrevocable Trusts Are Available?

At the law office of Shann M. Chaudhry, Esq. Attorney, PLLC, we offer an extensive range of irrevocable trusts in Texas (and using foreign trust jurisdictions – such as other states), including:

  • Life insurance trusts
  • Charitable trusts
  • Special needs trusts
  • Credit shelter trusts
  • Inheritance trusts
  • Qualified domestic trusts (QDOT)
  • Medicaid Asset Protection trusts (MAPT)
  • Grantor retained interest trusts
  • Generation-skipping trusts
  • Qualified personal residence trusts
  • Qualified terminable interest property trusts (QTIP)
  • Spendthrift trusts

How Does an Irrevocable Trust Affect My Taxes?

Your estate may generate tax liabilities for your loved ones when you pass away. An irrevocable trust can minimize and potentially eliminate this risk altogether. It accomplishes this because when putting assets into the trust, they are no longer yours and aren’t recognized as part of your estate by the federal estate tax. Assets can be sold to an irrevocable trust.  Assets can also be gifted to an irrevocable trust.  There are many factors to consider when transferring assets, including selection of the type of assets. 

Irrevocable trusts can be subject to their own tax regime, or they can be considered defective grantor trusts, meaning that the Trustmaker/Grantor is responsible for the taxes generated by the assets held in the irrevocable trust.  This can be highly advantageous when trying to deplete an estate to lower it below a certain threshold.

There are a multitude of reasons why to create an irrevocable trust and additional tax implications.  Make sure you are dealing with someone who understands how estate planning and tax laws interplay.