In Texas, a revocable living trust, also known as a trust, is a legal entity designed to control one’s assets. Trusts are created when one person, referred to as the trustor, settlor, or grantor transfers a property interest to a trustee to be held for a beneficiary. Trusts creator during the trustor’s lifetime are intervivos or living trusts. Revocable trusts refer to situations where the trustor retains the right to dissolve the trust. On the other hand, irrevocable trusts refer to situations where the trustor does not maintain the power to change or dissolve the trust. In most cases, a revocable trust becomes irrevocable when the trustor passes away. Both revocable and irrevocable trusts provide certain benefits, and it is important for anyone considering a trust to consult with an experienced estate planning attorney to ensure they select the appropriate product based on their family’s needs.
Benefits of a Revocable Living Trust
The most significant benefit of a living trust is that the assets in the trust can pass to the beneficiaries without probate. The Texas probate process is more straightforward than many other states; however, a revocable trust is advisable in certain situations. For example, a revocable trust is recommended for those who:
- Want privacy during the estate settlement process;
- Own property outside of the state;
- Have blended family, business interests, or estate taxes; and
- Anticipate that someone will contest their estate plan.
Establishing a revocable trust can enhance privacy, avoid probate court, and prevent hefty tax implications. Further, revocable trusts can protect inherited property and assets in the event of a divorce.
Revocable Inheritance Trust
In most cases, Texas courts consider gifted and inherited assets as “separate property” while dividing assets. However, creating a revocable inheritance trust can prevent superfluous disputes about whether an asset is “marital” or “separate” property.
A revocable inheritance trust is a trust tailored to maintain separate property assets. Some may consider creating this type of trust and transferring all separate property to the trust. Doing so can aid in preserving and establishing the separate nature of the assets. Further, owners can monitor the assets in the trust to safeguard the continued integrity of the separate assets.
Additional Estate Planning Possibilities
In addition to a revocable trust, individuals should still consider a pour-over will. These wills allow assets not included in a trust before the trustor’s death or assets received after their death to funnel into the living trust. Trustees must administer these assets under the terms of the revocable living trust.
Contact a Houston Revocable Trust Attorney for Immediate Assistance
The attorneys at McCulloch Miller, PLLC understand that trusts are a fundamental part of estate planning. Our Houston trust planning lawyers have over 50 years of combined experience handling these estate planning matters. In addition to Texas trust administration, our firm handles probate matters, special needs planning, public benefits planning, and Medicaid crisis planning. We provide clients peace of mind by creating comprehensive and legally binding estate plans. Contact our office at 713-936-9073 to schedule a free initial consultation with an attorney on our team.