Do I need a living trust?
- Living Trust Basics
- A living trust is a trust you establish during your lifetime that gives you continued control over the assets you place in the living trust.
- The main purpose of a living trust is to avoid probate.
- In order to create the trust, you must give specific trust property to a named trustee with the intent to create a trust for the benefit of one or more named beneficiaries.
- The biggest mistake people make is to sign a living trust and then never transfer the title to their property into the name of the trust.
- When a Living Trust may be Necessary
You may want to consider a living trust under the following circumstances:- When you own property in more than one state, a properly funded living trust will avoid separate probate proceedings in each state.
- If you will be moving from state to state on a regular basis, the living trust will save you the time and expense of possibly having to redo your will each time you move. Although a will properly executed in one state is valid in all other states for the purpose of disposing of your assets, such will may not contain the correct language entitling you to avail yourself of the simplified probate process allowed in such state if the correct language is used (see section B.3. under the question “Can I prepare my own will?”).
- If you want to avoid having your will eventually entered into the public records of the probate court, and having to file a listing of the assets owned by you at the time of your death, a properly funded living trust lets you avoid the entire probate process and keep your privacy.
- Living Trust Myths
- Many people think they need a living trust to avoid the expense or delay of probate. In Texas, however, the probate process is generally relatively simple and inexpensive if your will provides for an “independent executor,” and a living trust generally costs much more to set up and maintain than does a basic will.
- Many people also think they need a living trust to avoid the expense of a guardianship in case they become incapacitated. In Texas, however, a Statutory Durable Power of Attorney can achieve the same result at a fraction of the cost.
- Many people also think they need a living trust to avoid having their will contested. However, will contests are rare, and trusts may be contested as well based on lack of capacity, undue influence, and fraud.