What is an inheritance trust?

An inheritance trust is a legal entity created to hold assets for the benefit of certain individuals, called beneficiaries. Inheritance trusts are often used in estate planning to protect assets and ensure they are distributed according to the wishes of the decedent. In Texas, an inheritance trust serves as a legal, separate entity from its creator or trustee and allows the decedent’s assets to be managed and dispersed in a way that meets the trust’s objectives. An inheritance trust may be funded with either cash or more complex assets such as stocks, bonds, or other investments. The trust document outlines how the assets are to be managed and used as well as the disposition of the property upon the death or incapacity of the grantor. Often, this includes ensuring that the assets are distributed according to the decedent’s wishes, avoiding probate court costs, or preserving family property. These trusts can be set up by an experienced attorney to protect assets over the long-term. They can also help eliminate or reduce inheritance taxes. Inheritance trusts are often used by those with larger and more complex estates. Using this type of trust can provide benefits such as avoiding probate court costs, avoiding or reducing inheritance taxes, and providing tax-deferred growth potential.

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What is an inheritance trust?

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