Almost everyone has heard of Living Trusts and some have suggested they are almost magical in the things they can accomplish.  Living Trusts are effective at what they do, but “magic” and “law” rarely coincide.  We believe that Living Trusts can be a wonderful device for some people’s estate planning, but is it right for you?  Our recommendations on whether to handle your planning primarily with a Will or a Living Trust is a personal decision based on your personal situation.  There are three potential advantages of planning with a Living Trust:

  1. It is an excellent way to avoid multiple probates if your estate includes real property outside of Texas.
  2. It provides a better transition of financial management if your successor trustee is a financial institution or trust company.
  3. It is better protection against guardianship.

Probating a Texas Will gives an executor the authority to sell any property inside Texas.  It does not give an executor authority to sell property outside of Texas; therefore, when there are properties in other states, a Trust avoids multiple probates in those other states, which can be very expensive.  In these circumstances, a Living Trust is often the best answer.

If you are considering using a professional trustee to manage your funds for your family when you are gone, it might be better to create that trust now as a Living Trust, begin working with that financial company or trust company, and get a track record and experience with them before they take over when you pass away.

Guardianship is the expensive method of managing someone’s personal or financial life if they become incapacitated.  Powers of attorney are simple effective tools to avoid guardianship, but they are not very effective when there is infighting.  If those who you would like to run your financial advice would be attacked by others in the family, possibly in-laws or ex-spouses who would stir discord, the powers of attorney are highly likely to fail and guardianship to be the result.  A Living Trust is the “armored personnel carrier” that can survive this type of fighting and is a superior way for planning for those situations.

Is a living trust right for you?  We know only after we talk to you.  Like Justice Potter Stewart said: we know it when we see it.

Contact us today.

David M. Pyke

This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, specific tax, legal or accounting advice. We can only give specific advice upon consulting directly with you and reviewing your exact situation.