Limited Term Trusts

Trusts come in a variety of types, each of which is designed to do different things. A limited term trust is designed protect assets for a set number of years and then return them to the settlor at the end of the trust period.

Limited Term Trusts are designed to last for a specified number of years, known as the term, with the assets being returned to the settlor once the term has ended. For example, a small business owner who has been extremely successful recently is 40 years old, married, and the father of 3 children under the age of 10. He is earning a comfortable living from his business. As a result, he has excess money sitting around and does not need the income generated from the investments.

He is a small business owner, making his primary goal to protect his savings and assets from a lawsuit or some sort of legal claim. In addition, he wants to make sure that the funds are available for his retirement and to support his wife as well.

This man’s solution would be to set up a limited term trust. The excess income is transferred to a trust, which can be set up to do a number of things. It can simply be there until the settlor wants it returned, or it can be set up to pay for his children’s educations and then the remaining balance can be returned to the settlor.

The benefit of a limited term trust is that the amount in the trust is well-protected from any potential claims. Fortunately, the money will also be available to the settlor when he or she wants it later in life for retirement. The person will be retired, so asset protection concerns will be minimized.

Contact an Austin Probate Lawyer

If you are considering a trust fund or need to create an estate plan, contact the Austin probate lawyers of Slater & Kennon at 512-472-2431 to set up a consultation.