Building wealth takes time, dedication and sacrifice. Naturally, you want to ensure your hard-earned assets pass to your loved ones with minimal erosion.
In Texas, where probate can be time-consuming, and estate taxes can take a bite out of your legacy, trusts become a powerful wealth preservation tool. Here, we explore some of the most effective trusts for safeguarding wealth in the Lone Star State.
Dynasty Trust
Designed for multi-generational wealth transfer, a dynasty trust can potentially shield your assets from estate taxes for future generations. In Texas, a 2021 rule allows dynasty trusts to last 300 years, replacing a law that ended them within 21 years of certain people’s lives.
A dynasty trust can protect your wealth and help ensure it passes smoothly to future generations.
Grantor Retained Annuity Trust (GRAT)
A GRAT offers a unique opportunity to balance wealth preservation with income generation. You transfer assets to the trust while retaining the right to receive regular annuity payments for a predetermined period, providing a steady stream of reliable income.
When the GRAT ends, the remaining assets – which have hopefully increased in value – pass to your beneficiaries.
Charitable Remainder Trust (CRT)
A CRT allows you to achieve your philanthropic goals while simultaneously benefiting your loved ones. Once established, the trust pays a fixed amount to you or another beneficiary for a set period, providing a reliable income stream.
The assets left in the trust are distributed to qualified charities of your choice when its term ends.
These are just a few examples of using estate planning and trusts to preserve your assets now and for your descendants. Speak with someone who can help you design and implement a more comprehensive wealth preservation strategy for full protection.