Trusts Can be an Important Planning Tool for Non-Traditional Families

April 16, 2014
Law Offices of Debbie J. Cunningham

The use of a revocable trust can be an important estate planning technique for non traditional families and same sex couples.  All estate planning should begin with the four key documents but non traditional families and same sex couples need to take that planning a step further.

A revocable trust is established during a person’s lifetime and the trust document names a trustee and one or more successor trustees to manage the assets that are transferred to the trust.  An individual might name themselves as the trustee and their partner as the successor trustee.  If both partners contribute assets to the trust then they may choose to be co-trustees.  The trust can provide that the individual will manage the assets in the trust until he or she becomes incapacitated or otherwise turns over control to their partner or any other designated individual.

Upon death, the trust’s assets will not be subject to probate laws, making the transfer of assets private and seamless.  Unmarried partners can use this to transfer property to their partner instead of biological relatives at death.  Also, by naming the partner as co-trustee or alternate trustee, the partner is given access and control over property that might otherwise fall to biological relatives.

There may also be tax benefits to using a revocable trust.  It can postpone the tax implications of transferring property from one partner to the other.  However, there may be tax consequences at death depending on the size of the estate.  There are a number of strategies that can be implemented allowing the partners to reduce the tax implications of the transfer of assets at death.

Finally, it is prudent to use a revocable trust, instead of an irrevocable trust.  Since marriage between same sex partners is not currently recognized, there are also no corresponding divorce protections in the event two partners no longer wish to be attached.  A revocable trust can be easily dissolved allowing the partners to divide their assets if the relationship ends.

The revocable trust can be an excellent tool.  Non traditional families and same sex couples should work with an attorney to see if a revocable trust should be added their estate plan.

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Law Offices of Debbie J. Cunningham

Debbie Cunningham is an Irving attorney providing affordable estate planning to the Dallas/ Fort-Worth areas. She understands the steps you should take to protect yourself and your loved ones. Debbie is family-focused and wants to ensure her clients are fully informed on the options that are available for their families. Debbie’s own blended family has given her valuable insights into the complexities of family dynamics.

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