Do I need a living trust? College Station Texas estate planning attorney advises
Living trusts have been widely publicized as a superior alternative to wills. The truth is that both wills and living trusts are an effective means for passing on your assets to your desired beneficiaries. Each has its own advantages and disadvantages. To decide which is better for your situation, you should consult a qualified College Station, Texas estate planning attorney. Be wary of non-professionals who attempt to sell you “canned” documents without carefully analyzing your circumstances.
What a living trust can do
Avoid probate. With a properly drafted and funded living trust, your estate will not need to go through probate. You must transfer title to all of your assets to the trust; if no assets are in your name when you die, no probate will be needed to transfer title to your heirs. Probate will be necessary if assets are left out of the trust, which is a common mistake made by “bargain” trust providers.
Because Texas has a relatively simple probate process, avoiding probate is not a good plan for many clients. Many people find that the hassle and expense of probating a will is less than the hassle and expense of creating a trust, given that probate does not need to be paid for until death, but a trust must be paid for up front, and then must be maintained until death.
If you own real estate outside Texas, a living trust can help you avoid probate in other states, and this could save enough expense to justify the trust.
Privacy. A living trust, unlike a will, is not required to be filed in court and made a public record. Most of the time, the provisions of a trust are private and the trust operates without any court involvement. You can keep private the value of your estate and how you have decided to distribute it. No one outside immediate family need know that you have set up a trust to protect a child with a substance abuse or gambling problem. Probate proceedings, on the other hand, are public. Anyone will be able to read your will and look at the inventory of your estate that is filed with the court.
Avoid the need for a guardianship. A living trust can provide for a successor trustee to take over management of the trust assets if you become unable to do so. Typically the trust instrument will provide for the successor to take over when two physicians sign a statement that you no longer have the capacity to manage your affairs. No court proceeding is necessary. However, a durable power of attorney may be a less expensive way to accomplish the same goal.
Tax planning. Most estates are not subject to estate taxes. If yours is large enough to require tax planning, it can be accomplished through either a living trust or a will. The same techniques for minimizing taxes can be used in either instrument.
What a living trust cannot do
Avoid a contest. Living trusts, just like wills, can be contested on the basis that the settlor lacked testamentary capacity, was unduly influenced, or a victim of fraud. Trust contests are less common than will contests and more difficult to succeed at.
Avoid claims of creditors. Creditors can reach the assets in a living trust both during your life and after your death. In fact, probate of a will offers more protections from creditors. During probate, creditors must submit their claims in a certain format and comply with other rules. These procedures can even eliminate the debts if the creditors miss a deadline or otherwise fail to follow the rules. The catch is that these procedures apply only in a probate proceeding.
Help you qualify for public assistance. A living trust will not help you qualify for Medicaid benefits or other public assistance.
Get help with your estate plan
Whether you need a will or a living trust, your best option is to work with a licensed College Station Texas estate planning attorney. To consult with a skilled estate planning attorney at the Peterson Law Group, call 979-703-7014 or 936-337-4681 today.