Key Facts You Should Know about Living Trusts in Texas [Part I]

Many people think estate planning is something that only seniors need to worry about because it involves the transfer of assets to one’s heirs when one dies. Although there is some truth to this understanding of the function of estate planning, this emphasis only covers a small portion of what estate plans can accomplish. In addition to succession planning, estate planning documents like a living trust can provide asset protection from creditors, incapacity planning in the event of a serious accident and tax relief. In this two-part blog post, our experienced Texas estate planning attorneys at the law office of Thomas D. Reino have provided an overview of some basic facts everyone should know about a living trust.

A living trust can protect you and your family from the administrative delay, hassle and expense of probate.

One of the most important functions of a living trust is to avoid the probate process which can be costly. The time lag associated with the probate process can also be difficult for your loved ones if you are the primary family breadwinner. In this situation, those you leave behind may be left in a difficult financial predicament if they must wait for administration of your estate for access to funds to cover living expenses. A living trust is already set up prior to a person’s death so there is no delay or hassle with probate proceedings.

While a living trust can be a very effective way of avoiding probate, it is not the only option. Assets like real estate, bank accounts and insurance policies may be held in “joint tenancy with right of survivorship” or have an identified beneficiary. If an asset is titled in this way, it will automatically pass to a loved one without the need for probate regardless of whether you have a living trust. However, there are advantages and disadvantages to both strategies so you should speak with an experienced Texas estate planning attorney about which approach is best suited for your individual situation. It is important to note that many assets cannot be titled this way so even if you rely on the joint tenancy approach for some assets this will not cover all of your estate.

A living trust may save you money and avoid taxes but not necessarily.

While the probate process can be costly, Texas has an expedited process that can make probate relatively inexpensive. While a trust can avoid the expenses associated with probate, the cost of setting up a trust may be comparable to this expedited probate process in Texas so it is important to obtain legal advice regarding which approach is more suited to your needs. The cost of setting up a trust also is increased because you will need a special type of will called a “pour over will” along with the trust. The function of this special kind of will is to ensure that assets not specifically placed in trust are still covered in your estate plan. The living trust may also help with estate tax avoidance depending on the size of your estate.

At our Arlington estate planning law firm, Thomas D. Reino carefully evaluates your estate to create an estate plan that is appropriate for your specific situation. While this blog post provides answers to some common estate planning questions, the best way to get more detailed information is to contact us at 817.303.2133 or send us an email at tom@tomreinolaw.com so that you can set up an initial consultation.

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