In Texas, the probate system is not as expensive and cumbersome as in other states, so Revocable Living Trusts are not as popular here as they are elsewhere. An estate planning attorney can go over the pros and cons with you to help you decide whether such a Trust is right for you and your family. I've outlined some of these below.
- Privacy: As Mr. Fromm mentioned, probate records are public, while trust documents are not. If this level of privacy is something you value, you may wish to set up a Revocable Living Trust.
- Avoids Probate: Depending on circumstances, probate can be a long and expensive process. An estate planning attorney can help you determine whether a Trust would be a more efficient means of distributing your assets.
- Minimizes Contests to the Estate Plan: Contesting a Trust is generally more difficult than contesting a Will.
- Can be Used to Avoid Guardianship: As you age and it becomes more difficult to manage your assets, the trustee of your Revocable Living Trust can manage your finances, pay your bills, etc., making it less likely that you will need a guardian for your estate.
- Higher Up-Front Costs: Drafting and maintaining a Revocable Living Trust will likely cost more than drafting a Will. Further, once the Trust is created, it must be managed; if you choose to work with a corporate trustee, there will be management fees.
- Funding and Managing the Trust: For a Revocable Living Trust to be effective, it must own all of your titled, probate assets (your home, possibly your bank accounts, etc.). This will require more effort and organization on your part.
- You Still Need a Will: The Trust can only distribute those assets which it owns; therefore, you will still need to have a Pour-over Will drafted to cover any of your assets not distributed by the Trust. Otherwise, those assets will be distributed according to the laws governing intestacy, which may be contrary to your wishes.
The Valkovich Law Firm, PLLC provides this information to you only for the educational purposes of imparting general information and a general understanding of the law. This answer does not offer legal advice. The use of this information does not create an attorney-client relationship between you and The Valkovich Law Firm or any of its attorneys. Do not use this information as a substitute for specific legal advice.
You should talk with your tax attorney more to get a clearer idea of this thoughts. He has all your facts and should be conversant with TX law. However, such living trust do avoid probate and ensure privacy. Think, Michael Jackson's trust. So explore the details with your tax attorney but if you are not clear after such discussion you may need to consult with another estate attorney who you are comfortable with.
For more on estate planning and other issues, see Estate Planning Mistakes: 5 Not So Easy Pieces at http://www.sjfpc.com/estate_planning_drafting_wills_trusts.html. Please hit the like button at the end of the article if you found it helpful.
LEGAL DISCLAIMER Mr. Fromm is licensed to practice law throughout the state of PA with offices in Philadelphia and Montgomery Counties. He is authorized to handle IRS matters throughout the United States. His phone number is 215-735-2336 or his email address is firstname.lastname@example.org , his website is www.sjfpc.com. and his blog is <http://frommtaxes.wordpress.com/> Mr. Fromm is ethically required to state that the response herein is not legal advice and does not create an attorney/ client relationship. Also, there are no recognized legal specialties under Pennsylvania law. Any references to a trust, estate or tax lawyer refer only to the fact that Mr. Fromm limits his practice to these areas of the law. These responses are only in the form of legal education and are intended to only provide general information about the matter within the question. Oftentimes the question does not include significant and important facts and timelines that if known could significantly change the reply or make such reply unsuitable. Mr. Fromm strongly advises the questioner to confer with an attorney in their state in order to ensure proper advice is received. By using this site you understand and agree that there is no attorney client relationship or confidentiality between you and the attorney responding. This site should not be used as a substitute for competent legal advice from a licensed attorney that practices in the subject area in your jurisdiction, who is familiar with your specific facts and all of the circumstances and with whom you have an attorney client relationship. The law changes frequently and varies from jurisdiction to jurisdiction. The information and materials provided are general in nature, and may not apply to a specific factual or legal circumstance described in the question or omitted from the question. Circular 230 Disclaimer - Any information in this comment may not be used to eliminate or reduce penalties by the IRS or any other governmental agency.
Your tax attorney is correct as far as Texas is concerned. Probate is not as complicated or expensive in Texas as it is north of the Red River. Revocable Living Trusts are just one tool in estate planning. It is not a one-size-fits-all solution.
DISCLAIMER: This is not specific legal advice and does not establish an attorney/client relationship.
The cost of a Trust will be less than the cost of probate and the Trust will give privacy.
Most of my clients choose trusts(in Fla) for those reasons.
The answer given does not imply that an attorney-client relationship has been established and your best course of action is to have legal representation in this matter.
Everyone needs a will, at least as a backup in case assets aren't added to a trust during life. Do you need a trust? If avoiding estate taxes is not an issue, then I only advise a trust if 1) there is real property in more than one state; 2) they are needed for guardianship prevention; or 3) the client has an extreme privacy concern (since inventory of assets are not required for all probates in Texas any longer). Otherwise, probate is less expensive or cumbersome that creating and maintaining a revocable living trust. I disagree strongly that a trust does anything to avoid a contest or is harder to set aside than a will.
There is no legal relationship created or implied by the exchange of message on this website. All statements are not to be construed as legal advice but as general guidance. In all cases, an attorney should be retained to review the full circumstances and deliver advice consistent with the information learned.