Set up a Trust in Texas

Real Estate Law For Current or Prospective Property Owners

Set up a Trust in Texas

Real Estate Law For Current or Prospective Property Owners

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Setting up a Trust

Setting up a trust helps a person manage their property and assets.  In creating this fiduciary arrangement, you are assuring your property is distributed according to your wishes after you pass.

WHY FORMING A TRUST IS IMPORTANT

There are many reasons for forming a Trust.  As part of a well-crafted estate plan, it provides for your family after you pass and states how they will receive their inheritance.  Additionally, a Trust may ensure the avoidance of probate. 

Note: Probate is the legal process of authenticating a Last Will and Testament, assuming the deceased has had a Will prepared.

What is a Trust?

  • A Trust is an entity set up by a written document that is used to own property, including cash.
  • The written document setting up the Trust is referred to as a Trust Agreement.
  • Control of the property owned by the Trust is given to a Trustee.
  • Benefits of the property are given to a Beneficiary.
  • The Trustee and Beneficiary may be the same person, but this is not recommended.
  • A person who sets up the Trust is called the Trustor or Settlor.
  • The Trustor can be the Trustee and can also the Beneficiary, but this is not recommended.
  • Trusts may be set up when the Trustor is alive (Living Trust) or it can be set up in the Trustor’s Will (Testamentary Trust).
  • A Living Trust can be revocable or irrevocable and is set up while the Trustor is alive.
  • A Testamentary Trust can be revocable or irrevocable and is created by the Trustor’s probated Will.
  • Trusts may be set up for estate planning purposes or to take care of a special needs child after the parents are deceased.
  • A Trust can also be used for asset protection if it is used properly.
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Setting up a Trust in Texas

A Trust can be set up by an individual, group, organization or a corporation known as the Settlor or Trustor.  It is established to hold assets or property for a specific person or group, which are called the Beneficiary.

You may transfer real estate property into your Trust.  Additional documents may be needed for this purpose.

Control of a Trust is overseen by a Trustee.  In some cases this may be the Settlor or Trustor themselves or someone else may be named as a Trustee.  This person might be a trusted member of the family, an acquaintance or a professional.

A Trust Consists of:

  • Settlor/Trustor  – An individual, group or organization that sets up a Trust.
  • The Beneficiary – Individual(s) or group benefitting by the Trust.
  • A Trustee – May be the same as the Settlor/Trustor, or a close friend or a professional controlling the Trust.

Reasons for Creating a Trust

  • It may help manage your affairs in case of disability.
  • Avoids probate (where a judge determines a Will’s validity) and are considered more private than Wills.
  • May determine how money or assets are used by beneficiaries, especially those that have trouble making sound financial decisions.
  • May be distributed for a specific purpose like higher education.
  • May be used to give to charities.
  • May reduce or avoid estate taxes.
  • Help determine how difficult assets should be split.
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Experienced Texas Real Estate Lawyer

Do you have questions about setting up a Trust?  Email your questions directly to attorney Scott Steinbach at scott@steinbachlaw.com. Or speak with attorney him at 972-960-1850. There is no fee for your call.

The Steinbach Law Firm, P.C. prepares Trusts. Our fee is $950.

Scott Steinbach is AV Preeminent rated by Martindale-Hubbell.  Peer rated for Highest Level of Professional Excellence.