Trusts In Different States
Many people get invited to well-intended financial seminars in which the presenters push trusts for everyone. Or they move from states in which they had a trust, and they think they need to replicate that estate plan in Texas. But in Texas, we don’t all need trusts like in other states. In many other states (like California), the probate system is more onerous than ours – more court oversight, it takes longer, and it’s more expensive. So there, people are all better off by putting their property into trusts because that allows them to avoid probate. Here in Texas, the probate system is more user-friendly. There are some good reasons to have a trust, but certainly not just to avoid probate.
Why Do You Need A Living Trust?
So why might I need a Revocable Living Trust in Texas? Aside from avoiding probate, these trusts are helpful when you have a complicated distribution scheme to your beneficiaries. They are also used in second marriage situations when someone wants to ensure that their children from a previous marriage are provided for, while still allowing their current spouse the benefit of the money in the estate. They are helpful in passing out-of-state property to your beneficiaries without having to go through probate in the state where the property is located. They can help with asset management issues for elderly people. They are harder to contest than a will, if there is a risk of that. Trusts are used frequently to achieve tax planning for those couples whose estates are valued above the estate tax exemption amount. And they provide greater privacy than a Will.
Whether you need or want a trust just depends on your own personal and financial situation and your goals in estate planning.