Creating your will and other estate planning forms is very important. Having a will allows you to protect and provide for your loved ones, give back to the causes you care about, and control the legacy you leave behind. A living trust, also known as an inter vivos trust, is a popular alternative to the standard last will and testament. In Texas, the probate process, which can be costly and time-consuming, is avoided when assets are transferred to a trust during a person’s lifetime. We will go over the fundamentals of a living trust and show you how to create one in Texas below.
What is a Living Trust?
It is possible to use a living trust to disperse your assets in the event of your death. The trust is funded by moving assets into it once you have established it. As long as the assets have worth, you can put them in a living trust. This includes real estate, investment accounts, and more.
Revocable trusts and irrevocable trusts are two forms of living trusts. It is possible for a revocable living trust to be amended or revoked at any time during the lifetime of the trust creator. On the other hand, changing an irrevocable living trust once it has been set up is extremely difficult. As such, revocable living trusts are more common.
How Can Having a Will Help My Family?
Controlling your assets is possible with a will; you can designate specific beneficiaries and assign appointing individuals to manage and distribute your assets. Having a will can save your heirs a lot of time and money, as well as averting a potential family fight.
Additionally, a will can assist you to determine who will take care of minor children in the event of your death. Disinheriting people who would otherwise inherit is also a reason why people choose to make a will.
How Can Having a Living Trust Help My Family?
Assets held in a living trust are not subject to the probate process before being passed on to the trust’s designated recipients. Because of the state’s lengthy and expensive probate process, living trusts are especially useful to Texas citizens.
Your loved ones will thank you for setting up a living trust. As a result of you setting up a living trust, your heirs are likely to receive their money/property sooner. This can be useful if you have relatives who need to live off of the inheritance you leave them.
Steps to Setting Up a Living Trust:
Step1: Take an inventory of your belongings
Make a list of all of your assets, both tangible and intangible, and include them in this list.
What can be protected by a trust?
List of assets you may want to incorporate in a trust include:
● Property (like your house);
● Accounts with a bank and a brokerage firm;
● Artwork and jewels.
What cannot be protected by a trust?
Certain assets should not be included in your living trust. Included here are:
● Vehicles, such as automobiles, boats, and recreational vehicles. This is because they lose value over time and are difficult to keep track of when people buy and sell them.
● Assets that are not subject to probate, such as life insurance policies and retirement accounts. Do not put these assets in a trust because you have already designated them with beneficiaries, so they will not have to go through probate.
Step 2: Select a trustee
In a trust, the assets are managed by a trustee. Many people name themselves as trustees of revocable living trusts. The trust document should also name a successor trustee. In the event of your death or incapacitation, your assets will be managed by your successor trustee.
Step 3: Choose your beneficiaries
People or organizations that you designate as beneficiaries of your trust will receive the assets you have set aside for them. Your successor trustee will distribute the trust assets to your beneficiaries and close the trust upon your demise.
Each of the trust’s assets can have a beneficiary designated. It is even possible to designate a non-profit as a recipient! Just do not forget to include the charity’s entire name, company address, and Employer Identification Number in your letter of recommendation. Using a search engine like Google or the Internal Revenue Service’s Tax Exempt Organization Search database, you can find a charity’s Employer Identification Number (EIN).
Step 4: Get a Certification or Declaration of Trust
You will need capable lawyers to get a Texas Declaration of Trust paper. The State of Texas considers your document genuine as long as it has the relevant legal language and is properly executed. With the help of providers like the Kazi Law Firm, you can save money and be rest assured that it is legally binding.
Step 5: Having a notary public sign your trust document
In order for your trust to be valid in Texas, you have to notarize the trust document. Signing a document in front of a notary public can help authenticate it, therefore it is common practice.
Banks, libraries, law offices, and even your local print shop have notaries on-site. You can check the hours of operation of the notary at your preferred location by calling and making an appointment, or you can simply walk in.
Step 6: Transfer the trust’s assets
In order for your trust to function properly, it must contain your assets. Make sure to transfer any additional assets you acquire over your lifetime to your trust.
Can a Living Trust be Changed or Revoked?
Revocable living trusts can be changed or revoked as long as you have the mental capacity to do so.
You can file a trust amendment document if you need to make a minor modification to your revocable trust document and include it with your Declaration of Trust. In the event that you have made many adjustments, you may wish to contemplate a trust restatement.
You must first remove all of your assets from a revocable living trust before you can revoke it. After that, you will need to complete a Revocation of Trust form, which serves as formal documentation of your decision to end your relationship with the trustee. From your local probate court, you may typically obtain a copy of this form. An estate lawyer can also assist you in drafting the agreement. Sign and date the document after that.
A judge or the trust’s beneficiaries must normally approve any amendments made to an irrevocable living trust. Consider speaking with an experienced estate attorney if you want to make changes or revoke an irrevocable living trust.
Is a Will Still Necessary if you have a Living Trust?
Creating a “pour-over will” is a popular method for those who have a living trust. Any assets that you did not transfer to your trust while you were still living can be captured by a “pour-over,” which will “pour” them over to your trust when you die. Explore pour-over wills, including the process of making your own.
Reach Out to an Experienced Estate Planning Lawyer Today
Understandably, there are a variety of reasons why people avoid estate planning, such as the belief that it is solely for the wealthy, or a simple fear of death. In fact, everyone has an estate and setting up a living trust is rather inexpensive. Additionally, estate planning is not entirely about dying. A living trust allows you to decide what happens to your property while you are alive as well as after your death. Thus, for those who want to speed up the process of distributing their assets, a revocable living trust is a good option.
We can help you set up a Texas living trust as soon as possible. Schedule an initial consultation today and we will get you started.