What is a Living Trust in Texas?
Many people understand the purpose of and need for a will. It is a document that maps out a person’s wishes for their property once they have passed on. While it is essential to have a plan for your property to be disbursed after you have passed on, there are other options beyond a will that make your wishes more explicit and your estate more secure.
For example, forming a trust is an ideal way to gain more options and flexibility with your property and its distribution. There are many types of trusts, and a living trust is one of the best choices for the average person’s needs.
With a living trust, you can choose a trustee who will work to fulfill the specific requirements of your trust, which gives you the power to not only decide where your property and assets go, but you can also choose the timing and method by which they happen. Another distinct advantage of a living trust is that it can go into effect if you are alive but have been incapacitated by an injury or illness. This makes a living trust more comprehensive than a will. Because of the many differences between the two, it’s essential to speak with a knowledgeable attorney like the legal team at The Council Firm, PLLC, who can provide all the details you need to make the right decision for yourself and your family.
Does a Living Trust Keep Your Estate Out of the Probate Process?
Like many other states, Texas has a part of the court system called probate, where people who have passed away have their estates and property handled by court representatives. Probate can be costly and time-consuming, and it often doesn’t provide the desired outcome that the deceased or their family hopes to achieve. One of the most ideal alternatives to the probate process is the aforementioned living trust.
Because of the nature and design of a living trust, it generally does not require the probate process to go into effect. That means your estate can immediately begin the trust process, led by the trustee. No need for your loved ones to spend extra time, money, and effort waiting for the court to handle it.
However, like many aspects of estate planning law, specific key issues could cause even a living trust to end up in the probate process. Two key factors can lead to this complication.
What Factors Will Affect a Living Trust Ending Up in Probate?
While most living trusts tend to be “probate-proof,” specific key problems could still result in a living trust ending up in probate court. The good news is that there are only two primary reasons this happens, but the bad news is that they’re not always easy to identify.
The first reason a trust will end up in probate is if it is not set up correctly. That sounds like a simple issue to avoid, but the challenge is that several parts of a trust can be incorrect and, therefore, cause confusion or dispute. Firstly, there is the legal language itself. The document’s specific legal language and structure are part of what separates a trust from a will. When any of that is mishandled or miswritten, it lessens and potentially even negates the document’s purpose in the first place. There is also the issue of certain legal loopholes that the trust takes advantage of, which are not appropriately addressed. That can nullify the effectiveness of the document. For instance, if there are tax benefits in a trust that only apply in a certain way that hasn’t been fulfilled, that can suddenly become a costly mistake that puts the trust back into the hands of the court to sort out.
The second reason a trust may be placed in probate is if some aspect of the trust is deemed invalid. Because this is a legally binding document, all its elements must also be bound by law. That means if there is a dispute over the ownership of something included in the trust, the trust can be challenged, and the trustee could be prevented from distributing the disputed item or items. The trust would then enter the probate process to sort out the challenges.
The best way to prevent that is to work with an experienced attorney who can show you how to verify all aspects of the estate before creating the trust.
What are the Disadvantages of a Living Trust?
The truth is that creating a living trust has mostly upsides, unlike the disadvantages of a will. A will doesn’t protect or distribute your assets if you have been incapacitated but not passed away, and it is less flexible about the time and method of distribution than a trust.
However, there are certainly considerations to make about a trust. The first is the cost, which can be more expensive than a will. While it is undoubtedly not exorbitant compared to the savings and protection it provides, it is a financial consideration.
The second is that it can also be more time-consuming to create than a will. Again, that is because it takes more time and effort to construct a trust correctly than a will. However, that also saves your loved ones time and money after you have passed on, which is one of the primary advantages of a trust to begin with.
Do I Need an Attorney for My Living Trust?
Like most estate planning issues in the state of Texas, the court does not require someone to have a lawyer to create a living trust. There are ways for people to make a living trust without the assistance of an attorney. However, it’s important to remember that not being required to have an attorney is not the same thing as not benefiting from one.
As you can see from the above article, many details and factors can significantly impact the effectiveness of your living trust. Remember, your living trust is your line of defense to make sure that your wishes are followed and your property ends up with the loved ones you want to have it. You must get everything right because you will not get a second chance to make alterations once you have passed on or become incapacitated; from that point on, nothing can be changed, and if there are issues with the trust or something is missed, it must be dealt with during the probate process.
Don’t risk the future financial security of your family and your legacy by trying to handle the creation of a trust on your own without assistance from a competent and experienced attorney like the team at The Council Firm, PLLC. When you call us at 903-494-3380, we can get started immediately, helping you fashion an estate plan that fits your needs and secures your legacy for your loved ones without interference from the probate process.
