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Frequently, my clients ask me if they need a trust. Clients frequently ask about probate and ask “How can probate be avoided?” My answer is that it depends but there is a good chance that a trust is not what you need.
There are times that a revocable living trust is an effective estate planning tool but for many clients, it is a waste of money.
Trusts are promoted by many websites and literature that the public receives. Trusts are not a solution for all. To determine if a trust is a good idea for you, it should be discussed with an estate planning attorney. Please call our office to set up a free consultation.
Reasons A Living Trust Might Not Be Necessary
1. Probate is not complicated. Probate is not expensive if you have a good will and competent counsel.
The price for creating a revocable living trust, funding it, making transfers into the trust, and related documents will far exceed the cost of probate for a will that was properly drawn up to provide for independent administration.
2. Probating an estate of a properly drafted will is not timely or a lengthy process.
Texas law streamlines the probate process and rarely are there long delays when there is a properly drafted will. An independent administration under a well-drawn will requires only one hearing and minimal court involvement in the process thereafter. A competent, conscientious executor will move the process along quickly unless there are unusual complications.
3. You can avoid probate of many assets by placing them in joint tenancy with the right of survivorship, beneficiary designation, or payable on death designations.
This is a better and simpler way of passing on many assets upon death rather than spending the money to place assets in a living trust. If beneficiaries are minors or have special needs, you may require a trust but this can also often be accomplished in a good will.
4. Living trusts are currently not needed by most individuals for estate tax planning.
Under current estate tax regulations, unless you have an estate worth more than $12 million per person, you have no need for a living trust to avoid estate taxes. This could change in the future if Congress changes the estate tax laws.
5. If assets are not added to the trust, the purpose of having a living trust can be defeated and probate is still required.
When a person has a revocable living trust, all assets must be properly titled. If this is not done, there may still be a probate required to transfer the title, and the expense is multiplied.
Reasons You Might Need A Trust
1. Ownership of property in different states or many counties in Texas may require a living trust.
2. A person needs special assistance in managing assets or special needs children.
3. A person wants to provide special conditions to receive assets.
If you have questions about whether a trust would be a good fit for you and your family, please contact the office at 713-467-1760 to schedule a consultation.
