Is a Revocable Living Trust Right for You?
What Is a Revocable Living Trust as Recognized by Texas Law?
Per Texas law, a living trust is a trust that is created and established during the lifetime of the settlor (person creating the trust). During the lifetime of the settlor, and after the creation of the trust, the person creating the trust would transfer specific property, such as vehicles, houses, etc., into the trust. This is called the funding of the trust. A common example that you may see is a vehicle being insured in the name of the trust, such as “The John Smith Trust.” Another common example would be property, such as rental houses or office spaces that are rented to businesses.
Benefits of a Living Trust
The most sought-after benefit of having a living trust in the state of Texas is the avoidance of the probate process. Because the property is transferred to the trust prior to your death, the distribution of the property would not occur per probate guidelines. The reason why the property would avoid probate transfer is because the property was not held in your name or owned by you upon your death—instead it was owned by the trust.
What Makes a Living Trust Revocable?
A living trust is revocable if stated in the trust document itself or deemed so by Texas law. This means that at any point during your lifetime you can terminate a trust that you created. There are other ways that a trust can be revoked by law, but these would be best to discuss with your estate planning attorney when discussing if a living trust is right for you and your loved ones.
Consideration When Creating a Living Trust
There are many things that you should discuss with your family and your Texas estate planning lawyer when you are considering creating a living trust:
Which property do I want to transfer/should I transfer to the trust?
- Most people do not like the idea of having their property owned and controlled by a trust. The controller of the trust, named the trustee, could be you if you created the trust, or it could be anyone you choose (barring certain considerations). It would be wise to discuss with your attorney what would be best.
Who do I want to benefit from the trust?
- While the answer is normally present in your mind when you first considered creating a trust, you may wish to revisit your choices throughout your lifetime. Should your mind change in regard to the beneficiaries of the trust, you should discuss this with your attorney to make the appropriate changes as soon as possible.
What benefits should be given?
- This is often the most difficult consideration. Does everyone who you name in the trust document receive an equal portion of the trust or do some benefit more than others?
The Texas revocable living trust can be a powerful document in the financial security of your loved ones during and after your lifetime. Call our office today to discuss if it is an appropriate and advantageous addition to your Texas estate plan.