Revocable Living Trusts in Texas
Should you have a living trust to avoid probate in Texas? Other than avoiding probate, are there other reasons to have a Revocable Living Trust?
The Revocable Living Trust is a trust created during the settlor’s lifetime that can be modified by the client after it’s creation. By the way, the “settlor” is the person who initially establishes a trust. They are the most popular form of trust. Once the trust is created, the trustee manages the trust for the benefit of the named beneficiaries.
Most commonly, these trusts are revocable by the settlor. Such a trust is often called a “Revocable Living Trust” or “living trust” and can be revoked or amended at any time by the settlor during the settlor’s lifetime. Living Trusts gained tremendous popularity in recent years, primarily for their ability to avoid probate. If a person puts property into the Living Trust in Texas prior to death, since the person does not technically own those assets in the trust upon death, those trust assets pass directly to the trust’s beneficiaries outside of the Texas probate process.
A living trust can help your family avoid probate in Texas. This is especially helpful for married couples, where the family would potentially have not one but two probate cases.
While a living trust is often ideal merely for probate avoidance, a living trust does have other advantages. First, many people do not want the whole world to know the value of the assets they own when they die. When assets pass through the probate process, anyone could find out the worth of the estate. A living trust, on the other hand, would grant privacy to the estate since the assets pass outside the probate process.
A living trust may also be advantageous when the settlor has property outside of Texas where the probate process isn’t as efficient, when the settlor is certain that his will is going to be contested in court, or when the settlor genuinely needs assistance managing assets (as is common with Alzheimer’s sufferers). There are a myriad of legal and financial factors in choosing an estate planning tool.
We like to say that a living trust is almost always better than a will, but that doesn’t necessarily mean adding a living trust is worth it for every estate planning client. With estate planning, there is no such thing as a one-size-fits-all solution. That’s why we think you should meet with an estate planning law firm that has prepared thousands of estate plans, including many trusts.
Why Are Revocable Living Trusts Becoming So Popular in Texas (Instead of Wills)?
1. Avoiding Probate
Probate is the legal process a last will and testament goes through after a person’s death. Probate can be time-consuming, expensive, and can tie up assets for months (or even years). It’s much worse if the person didn’t even have a last will and testament.
Revocable trusts can help avoid probate by allowing assets to pass directly to beneficiaries without going through the probate process.
2. Maintaining Privacy
Probate proceedings are public record, which means anyone can access information about the assets in an estate, the beneficiaries, and the terms of the will. Revocable trusts can help maintain privacy by keeping the distribution of assets private.
3. Planning for Incapacity
A revocable trust can also be used to plan for incapacity. If you become incapacitated and are unable to manage your own affairs, the trustee you have named in the trust agreement can step in and manage your assets for you. This can help avoid the need for a court-appointed guardian or conservator.
4. Providing for Minor Children
Revocable trusts can also be used to provide for minor children. A trust can be set up to hold assets for the benefit of minor children until they reach a certain age, at which point they will receive the assets.
5. Managing Complex Assets
Revocable trusts can be particularly useful for people who own complex assets, such as businesses or real estate investments. By placing these assets in a trust, you can ensure that they are managed in accordance with your wishes and that they pass to the beneficiaries you have named in the trust agreement (without going through probate).
While estate taxes are not currently an issue for most Texans, revocable trusts can still be used to minimize the impact of taxes for those with larger estates. By placing assets in a trust, you can potentially reduce the amount of tax burden on the surviving family members.
7. Avoiding Multiple Probate Proceedings
If you own property in multiple states, your estate may be subject to multiple probate proceedings. This can be time-consuming and expensive. By placing assets in a revocable trust, you can potentially avoid multiple probate proceedings and simplify the distribution of your assets.
8. Avoiding Family Conflicts
Probate proceedings can sometimes lead to family conflicts. By using a revocable trust, you can help avoid these conflicts by clearly outlining your wishes and avoiding the need for court intervention. Since there isn’t a public-record last will and testament going through probate court, it is much more difficult for a disgruntled person to legally challenge a revocable living trust.
One of the main advantages of a revocable trust is its flexibility. The trust can be modified or terminated at any time, allowing you to make changes as your circumstances change. As a rule, trusts are much more flexible than wills. Here at our Richardson Estate Planning Law Office, we’ve prepared some extremely creative revocable living trusts. If your situation calls for a unique distribution plan, a revocable trust may be for you.
10. Easy to Set Up
Revocable trusts are relatively easy to set up. While you will need to work with an estate planning attorney to create the trust agreement, once the trust is in place, you need to fund the trust. We’ll provide instructions for funding the trust, and we’ll assist with the funding of the trust if requested. From there, a revocable trust is easy to maintain and can provide peace of mind for years to come.
In conclusion, there are many reasons why people choose revocable trusts in Texas. Revocable trusts can help avoid probate, maintain privacy, plan for incapacity, provide for minor children, manage complex assets, minimize estate taxes, avoid multiple probate proceedings, avoid family conflicts, and provide flexibility.
Here at Shutt Law Firm, we live by the mantra: “Less is More.” We prepare estate plans without overcomplicating the process for our clients. It’s helpful that we’ve prepared thousands of estate plans. That experience has helped us streamline the process.
The first step is to schedule a meeting. We can meet with you in-person at our law office in Richardson, Texas, or we can meet with you remotely (phone or Zoom). During that initial meeting, we’ll discuss your preferences and gather all the information we need. Then, we’ll prepare your estate plan. Finally, we’ll meet with you to review your documents together and sign them with notary and witnesses. The whole process can be completed in as little as one week.
It’s important to find an estate planning attorney who’s a good fit. Let’s chat!