A Basic Understanding of Trust Documents

A Basic Understanding of Trust Documents

Although many people still request Wills from their attorneys, it’s now often best for tax purposes to have the bulk of your estate transfer to others through one or more trusts. To better understand how trusts work, you first need to understand that there are living trusts and testamentary trusts.

Living trusts, also known as “inter vivos” trusts, are created during the grantor’s (or requesting party’s) own lifetime. By contrast, a testamentary trust is created within a Will and doesn’t become legally enforceable until after the grantor has died. As your estate planning attorney will tell you, there are two types of living trusts – those that are revocable and those that are irrevocable.

Revocable trusts let you maintain control over the trust assets, allowing you to revoke or change the trust’s terms whenever you believe it’s necessary. Should you instead create an irrevocable trust, the law no longer views the assets in the trust as yours – therefore, you normally cannot make any changes to the trust without the trust beneficiary’s consent.

While there are many different types of trusts and ways to set them up, the following ones are among those commonly requested by clients.

Frequently Requested Trusts

The Charitable Lead Trust. This type of trust can be created during the grantor’s own lifetime or upon that individual’s death. It provides for a type of annuity to be given to a charity for life or for a specific term of years. If there are any remaining trust assets, they are passed on to non-charitable beneficiaries when the trust terminates.

The Credit Shelter Trust. Many married couples with children often choose this type of trust because the surviving spouse can maintain full rights to the trust assets until his or her death. At that time, the trust benefits can then pass to the children. This trust is also commonly used because it allows the creator to escape estate taxes when passing the trust assets on to heirs.

The Irrevocable Life Insurance Trust. When you move your life insurance out of your estate by having this type of trust created, it’s no longer part of your taxable estate. The funds are then readily available to help pay for any possible estate costs or for other immediate cash needs of your beneficiaries.

Generation-Skipping (or Dynasty) Trusts. Grandparents often like to set these up because they’re designed to allow grantors to give tax-free money to beneficiaries who are two or more generations their junior.

The Qualified Terminable Interest Property (Q-TIP) Trust. If you’re in a second or third marriage and you and your current spouse had children during earlier marriages, you’ll want to learn more about this trust. It helps you not only leave your surviving spouse with income, it also lets you leave specific assets to your various children.

The Qualified Personal Residence Trust. You can use this to remove the value of either your main residence (or a vacation home) from your estate. It’s especially wise to create this type of trust regarding a property that’s very likely to increase in value over time.

The Special Needs Trust.  Many families have at least one member who suffers from some type of serious physical or mental disability. When you set up this type of trust, its terms can be restricted regarding how the assets can be used – thereby still allowing your loved one to qualify for certain types of government benefits.

As this article indicates, there are many different types of trusts that offer distinct advantages and disadvantages. Please feel free to contact our firm with any questions you may have about the specific types of trusts that may best suit your goals and preferences.

Sexual Harassment: How Should Witnesses Respond?

Victims and witnesses of sexual harassment often feel robbed of their sense of safety and peace of mind. After all, when someone is sexually harassed in an overt and physical manner, an actual assault and battery may have occurred. Sexually harassing others is a coward’s game, arguably born of narcissism or self-hatred – coupled with a desperate grab for perverse power.

However, many eyewitnesses aren’t sure what they should do. Some of them worry that if they simply turn away and pretend they didn’t see anything, they may be enabling the abuser. Yet how can safety be restored when no one will report these offensive acts? Fears of retaliation and other related issues are discussed further below.

Few people ever “win” in these situations — even employers often feel trapped since they have a duty to maintain safe work premises.

What Do Co-Workers Fear Most When They Witness Sexual Harassment?

Several studies and surveys have revealed that victims of sexual harassment – and those who witness it – often fear the same repercussions. Their most common concerns are set forth below.

  • Public or private shaming of the victim (or witness). Harassers often enjoy the turmoil they know they’re creating for others. In many ways, they’re like arsonists who take an initial pleasure in both setting a fire and then watching from afar to see everyone scurry around trying to minimize the damage.
  • Retaliation. While American laws exist to minimize the effects of retaliation, the fact remains that, once a harassing party decides to “silence” an accuser or witness, that person’s career may be permanently damaged.
  • Failing to adequately describe the offensive behavior. Since abusers often have few moral constraints on their behavior, they may have taken great pride in at least partially hiding their offensive acts – purposefully making it harder for witnesses or accusers to step forward.
  • Uncertainty about whether – as witnesses –they should first speak with the harassed victim before or after contacting human resources. Sadly, there are no foolproof steps for safely handling this type of matter. One of the most pragmatic and safest first steps forward is to consult your employer’s handbook on reporting such behavior.

You may also want to contact your Houston employment law attorney for further advice on how to proceed. If the harassing party knows that you witnessed the offensive behavior – your job and future promotions may already be at risk. It’s always wise to quickly find what your best legal options and choices are — based on your specific circumstances;

  • Concerns that retaliation may ruin your career (at least temporarily). This is a very valid concern. After all, abusers will often stop at nothing to hide their behavior since they greatly enjoy it, view it as a privilege – and think any punishment would be unfair. The true stories about how Hollywood producer Harvey Weinstein went about trying to silence his accusers (and possibly, the witnesses to his abuse) are shocking. However, victims and witnesses who report most types of sexual harassment can still win major lawsuits that can compensate them for their suffering and restore their careers.
  • Uncertainty about whether reporting the abuse may take a permanent emotional or psychological toll on them. Numerous studies have indicated that women suffer extensively when they report sexual harassment at work. Since their truthful reports are often not believed, their loss of positive self-esteem can cause serious problems with both depression and even PTSD. Furthermore, if the person reporting the gross behavior has ever previously been sexually harassed or abused, the long-term psychological damage of the newest abuse can take decades to resolve.

You Must Decide Which Steps Forward Best Suit Your Circumstances

Besides speaking to a lawyer, here are some other steps you believe you should consider taking.

  • Carefully study your employee handbook sections addressing sexual harassment. Decide if you feel comfortable doing what’s advised.
  • Keep a journal. Record the dates on which you take any steps to try and address the problem, who you’ve spoken with – or met with – and their responses to you. Note all perceived acts of apparent retaliation, if any. (Be aware that you may later need to turn over a copy of this journal to others if a lawsuit is filed).
  • Make a copy of any written reports or complaints that you decide to file. You must seriously consider asking a lawyer to review anything of this nature first;
  • Confide in one or two long-term, trusted mentors about your situation – people who do not work where you do. This may prove crucial if you need to find a new job while pursuing litigation.
  • Ask your employer for an immediate copy of any reports being placed in your file about your current complaints.

Always keep in mind that if you personally do decide to report the sexual harassment that you’ve witnessed, you’re playing a critical role in trying to resolve a very serious problem.

Our firm is always available to discuss any workplace problems affecting you. These can include sexual harassment, unfair pay issues, denied promotions, various forms of discrimination, wrongful termination — or any other matter that’s unfairly denying you the right to achieve your full potential.