Are there reasons to get a revocable living Trust in Texas?
Maybe you've come from another state, like California, where the probate process is expensive? And you're wondering if you need a revocable living Trust in Texas.
The probate process in Texas is relatively cheap and straightforward compared to some other states. So, upon learning that, many people stop their analysis there and just get a Will.
However, there are reasons for getting a revocable living Trust in Texas, nonetheless.
By using a revocable living Trust in Texas, your heirs can avoid probate administration entirely. However, they will still have to go through Trust administration. The main difference is that the probate administration, although relatively inexpensive in Texas, requires the public filing of the Will. If you have privacy concerns, you may consider using a revocable living Trust rather than a Will.
Such privacy concerns usually involve children. You probably don't want neighbors, colleagues, or foreign internet scammers to know how much you are leaving to minor or young adult children. Alternatively, if you’re going to exclude a child, or include a secret child, you may not want that information made public.
Should you seek to exclude a child or family member from your legacy, the use of a revocable living Trust will remove the Trust assets from a potential will contest. By not using a Trust, you could hold up the transfer of assets for your intended beneficiaries as the litigation drags on in the courts.
Another reason to consider a revocable living Trust is to retain property in your name in other states. Putting that property in a living Trust will avoid the cost of ancillary probate in those other states. It will speed up the transfer of those assets to your intended beneficiaries. Whether these are real estate or oil and gas interests, putting these out-of-state assets in a single document certainly saves time, money and avoids headaches for your loved ones.
Finally, for this discussion, you may consider a revocable Trust if you are concerned about your deteriorating capacity down the road. Making your intentions known by creating and funding a Trust, and administering that Trust for a length of time, may remove the issue of incapacity from the potential contest due to statute of limitations.
As an aside, in circumstances where you want to exclude a relative entirely, it might make more sense to give them something of value - which they would lose if they contested the Trust or Will. In the case of a revocable Trust, the relative might be scared to lose that valuable bequest during your lifetime if they challenge the Trust. Their delay will allow the time for a timely suit to expire.
You may want to use a Will as your main planning tool in Texas despite the advantages of a Trust. If you do not have children, you may not be that concerned about privacy. You may determine that the cost of any privacy concerns that you do hold are not worth the potential cost of Trust administration.
If you have minor children and you have a pour-over Will that distributes your estate to a Trust for the benefit of your children for a period until they reach the age of majority or other age of maturity (or their death), there will be costs to administer those Trusts. So, using a Will or a Revocable Trust would have the same Trust administration costs after your passing.
If there are capacity issues, you might want to go with a Will. Generally, a Will requires a lucid moment during the signature to withstand a capacity contest by a relative who believes they were shortchanged by your plan.
Finally, the funding of a revocable living Trust requires some work on the front end to execute properly. In my experience, people sometimes overlook this crucial step. The failure to properly retitle assets into the name of the Trust can cause delays and run-up costs for the administration of the Trust and Estate. If the assets are in Texas, you may just want to use a Will to avoid this step. However, as mentioned above, if you have assets in other states, it really does make sense to avoid ancillary probate by using a Trust.
So, in Texas, you may not need a Trust. However, the privacy advantages to you and your beneficiaries may make it more enticing than a Will. If you have a complicated personal life, you may want to use a Trust for several years as an extra level of protection to avoid a contest.
(By Appointment Only)
14425 Falcon Head Blvd
Austin, TX 78738