Texas Estate Attorney Giving You the Representation You Need to Establish a Living Trust

Everyone needs to plan ahead for after they’re gone. While it may not be something we like to think about, it’s crucial to have legal protections in place for our families and our property. Without the proper documentation in place, your loved ones could find themselves facing an uphill legal battle after you are gone. This could mean hours spent in courtrooms and attorneys’ offices, fighting for ownership of the money and property you want your loved ones to have. It could also mean debt collectors, the government, and other entities going after your estate.

Most people know that wills are legal documents establishing how a person wants their assets distributed after death. What many people don’t know is how Living Trusts can also play an important role in controlling assets upon a person’s passing. If you’re worried about what could potentially happen to your assets after you’re gone and you want an extra level of security for your family, a Living Trust may be the right thing for you to consider in your estate planning.

What is a Living Trust?

Living Trusts are different from wills in that they take effect before you are deceased. Instead of an executor who will distribute your assets after you are gone, you will name a trustee. The trustee will become the legal manager of your trust assets while you’re still alive. You may be your own initial trustee, or you may name a trusted third party to serve in this position if you want them to have authority to manage trust assets immediately. The trustee will manage and protect these assets. The advantage of this is that, when you die, assets may already be in trust or may pay directly to the trust through a beneficiary designation, and the trustee has uninterrupted access to those assets. At the appropriate time, the trustee will distribute your assets as laid out in the Living Trust.

In Texas, there are two major types of Living Trust: Revocable and Irrevocable. A Revocable trust allows you to make changes to the arrangement, including what assets are in the trust, who is trustee, who are beneficiaries, and how distributions are to be made to beneficiaries. An Irrevocable trust is a permanent, fixed arrangement and cannot be changed.

There are various advantages and disadvantages to a Revocable versus Irrevocable trust. While a Revocable trust allows you to make changes, you are still financially liable for any taxes or responsibilities associated with the assets. An Irrevocable trust provides an extra layer of protection to your assets but permanently places those assets in the hands of the trustee until you die. Every person’s situation is unique, and it is best to discuss with an attorney whether a Revocable or Irrevocable trust is best for you.

What are the Advantages and Disadvantages of a Living Trust in Texas?

There are numerous advantages to establishing a Living Trust.  

• Probate: The creation and property funding of a Living Trust prevents the assets in the trust from going into probate. Probate is a legal process for payment of debts and distribution of assets after a person dies. This can be an expensive and time-consuming process for your loved ones. A Living Trust can also help protect your family and loved ones from creditors.

• Ease: Because clear instructions are provided to a trustee while you are still alive, that person can easily transfer ownership of your assets to your intended beneficiaries after your death. 

• Protection: Because a Living Trust controls the manner in which ownership of assets is transferred after your death, it can protect beneficiaries from some creditors. 

• Mental Capacity: If you become mentally incapacitated due to an injury or illness like Alzheimer’s Disease, a Living Trust allows the trustee to make sure your assets are managed and distributed the way you want. 

While there are many advantages to a Living Trust, there are also disadvantages as well.  It’s important you are aware of any potential drawbacks to a Living Trust before you place your money and assets into one. Some of these disadvantages include:

• Cost and Complexity: It can be expensive to establish a Living Trust. The cost of a trust can vary widely depending on a variety of factors. Wills are typically less expensive to create, but they must be probated after a person’s passing to be effective, resulting in unexpected costs to surviving loved ones. 

• Ownership: You will be transferring ownership of your assets to a trustee. If you have a falling out with the trustee or come to believe they are no longer trustworthy, it can be difficult to re-obtain ownership if the trust was made Irrevocable. 

• Inflexibility: In the case of an Irrevocable trust, it will be difficult, if not impossible, to make changes. This is not a concern with a Revocable Trust.  Wills can be changed at any time. 

It is important to note that a Living Trust is not a will. A will leaves behind specific instructions for the distribution of your probate assets and estate after you have died, but it must be probated in order to have any effect. 

Is a Living Trust Right for Me?

Everyone’s financial situation is different, and everyone has different hopes and expectations for what will happen to their possessions after they pass away. The one thing that links us all is we want our loved ones to be cared for after we are gone. If you or a loved one is considering a Living Trust, don’t hesitate to contact Rainey and Rainey, Attorneys at Law. We are located at 3809 W. Waco Drive in
Waco, Texas, and at 204 IH 35 S Service Road, suite 100, Georgetown, Texas.

We know estate planning can be a complicated, time-consuming, and emotionally challenging task. Our attorneys approach every individual with compassion and sincerity to help you and your loved ones handle one of life’s most difficult transitions. With Rainey and Rainey, you’ll always be able to rest assured your family and loved ones are being taken care of. If you or a family member are considering a Living Trust, don’t hesitate to contact Rainey and Rainey today at 254-457-5083 or email us for a consultation.