Understanding Revocable Living Trusts in Texas

 Posted on August 23,2022 in Estate Planning and Probate

Trusts are often the smarter way of planning to distribute your future estate property. Wills come with a lot of pitfalls - specifically, that your loved ones will have to go through an often-challenging probate process. Trusts allow your future beneficiaries to skip the time-consuming proceedings and cost associated with probate and may offer a number of other benefits in addition. However, trusts are not understood as well as wills are. There is still a prevailing popular belief that trusts are for the ultra-wealthy, those families whose children and grandchildren will never have to work for a living. This is far from the truth. You may be surprised how much you and your loved ones could benefit from creating a revocable living trust. Our attorneys can answer any other questions you may have about how trusts work or how they could help you. 

How a Revocable Living Trust Works

A common source of confusion is that there are multiple unique types of trusts to choose between. There are irrevocable trusts, special needs trusts, revocable living trusts, and even something called a testamentary trust, which can only be created using a will. These are just a few of the forms a trust can take. 

This post will focus on the most common type of trust used today - the revocable living trust. First, you should know that “revocable” has its plain meaning. You can undo a revocable living trust at any point in your life (so long as you still have the mental capacity to sign legal documents) and for any reason. If you feel that your trust is no longer working for you or your loved ones, it is fairly simple to revoke the entire thing. 

“Living” also has its plain meaning - a revocable living trust is made and takes effect during your lifetime. This term is mainly there to distinguish these trusts from testamentary trusts, which do not take effect until the testator has passed away and their will gets through probate. 

A trust is a legal entity that can own property. It is managed by a trustee, who controls what is done with the trust principal - the property placed in the trust. In the vast majority of cases, the person making the trust will name themselves as trustee in order to retain control over their own trust property. 

You will first create the trust. You will then fund the trust by moving money and property in it. Once your property is in the trust, the trust owns it. But, as trustee, you still have complete control over the trust and everything in it. 

In estate planning, you will appoint a successor trustee to take over for you when you pass away or become incapacitated. The successor trustee is bound to make distributions according to your instructions. Estate planning this way builds in extra flexibility and offers your successor trustee some discretion in making distributions to your beneficiaries. 

Call a Texas Trust Lawyer

Geoff Mayfield, Attorney at Law creates unique trusts to suit the particular needs of each client. Our skilled Wilson County trust attorney will help you build the trust that is right for you. Call 210-535-0870 for a free consultation. 

Source:

https://www.forbes.com/sites/forbesfinancecouncil/2020/03/10/five-reasons-you-might-need-a-revocable-living-trust/