Trusts in Texas
In many states, the use of trusts as an alternate to a traditional will is something that you hear people doing on a routine basis. Because of the relative ease in the probate process in Texas, the use of a trust in place of a will is not nearly as prevalent as in some of these other states. However, there are some good uses for trusts in Texas.
The most widely discussed type of trust is the living trust. This trust is usually used to take the place of a will. Using this trust, the creators can effectively hold their assets in the trust during their life, and then the division and distribution of the assets upon death is controlled by the trust, rather than by a will. People will use these trusts so that they can avoid probate, but probate in Texas is generally an easy process.
The use of a living trust by someone in Texas is beneficial when the person owns real estate in another state. The out-of-state real estate can be transferred into the trust and distributed according to Texas law at death, rather than requiring the need for probate in that other state at the time of death. This can be a huge savings of cost and time and hassle for your executors and/or family members when you die.
Other types of trusts are utilized in wills to hold assets for a minor child if his or her parents or grandparents die leaving them assets prior to a specified age. Because minors cannot hold assets, these trusts help to provide a mechanism for appointing someone to hold the assets for the children and to make appropriate decisions for how the assets should be used prior to the child reaching the age that their parent or grandparent feels is appropriate for them to receive large sums of money.
Trusts can be utilized effectively in Texas. It is important, however, to seek competent legal advice about the use of trusts as they can be complex and can have very specific consequences.
Copyright ©2007, Ford & Mathiason LLP, a Texas Estate Planning and Probate firm. Used with permission.