If you’re like most people in Texas, your home and other real estate make up a significant portion of your total assets. You have invested a lifetime of hard work and savings into your property. So what will happen to it when you’re gone?
For many, the best way to ensure their real estate passes on as they wish is using a trust. Trusts provide you control over your assets while avoiding potentially lengthy and costly probate court proceedings after your death.
At Your Legacy Legal Care, we have helped hundreds of Texas families set up trusts tailored to their unique needs and assets. In this article, we’ll explore the key benefits our clients have experienced from putting their property into a trust.
What Types of Real Property Can Go Into a Trust?
In Texas, the main types of real property assets that can be transferred into a trust include:
Houses
Condos
Land
Rental properties
Commercial property, such as office buildings, retail space, and warehouses
Any legal interest in real estate, such as easements, mineral rights, water rights, leaseholds, etc.
All forms of real property in Texas can be conveyed to a trust for administration during your life and future distribution to beneficiaries.
The Many Advantages of Putting Property in a Trust
Placing your real estate into a customized trust provides numerous benefits for Texas property owners. Below, we will explore the key perks of titling your property in a trust:
1. Avoid Probate to Transfer Property Faster and Cheaper
The top reason Texas homeowners put their property into trusts is to avoid probate. The court-supervised probate process can sometimes take over a year in Texas. All assets in the deceased person’s name must pass through probate before being distributed.
With a trust, your property transfers immediately to beneficiaries without probate. This saves significant time, legal fees, and court costs associated with probate.
Texas allows independent probate administration, but even this streamlined process takes a minimum of 6 months and has court filing requirements. A properly structured trust lets you transfer real estate faster and without the hassle and cost of probate.
2. Maintain Privacy Over Your Assets and Plans
Probate records are public in Texas, meaning anyone can find out the details of the estate’s assets, debts, and distributions. Trusts maintain complete privacy over your property and estate plans.
The terms of your trust stay private. Only your chosen beneficiaries and the trustee need to know the details. Keeping sensitive information secret can help avoid family disputes over inheritances.
3. Protect Assets from Creditors and Lawsuits
Placing property in certain types of trusts, like irrevocable spendthrift trusts, can protect it from your creditors and beneficiaries’ creditors even after inheriting trust assets.
This can be important for beneficiaries in high-liability professions like medicine. Trusts can also help insulate property from divorcing spouses, lawsuits, and other claims.
4. Safeguard Your Property if Incapacitated
Unfortunately, many adults eventually become incapacitated by illness or declining mental capacity before death. Trusts include legally binding instructions for how your property should be managed if you become incapacitated or unable to make decisions.
This avoids the need for a court-appointed conservatorship over your assets. Your hand-selected trustee will step in to manage the trust according to your wishes in the event of incapacity.
5. Avoid Family Disputes and Will Contests
Heirs sometimes challenge wills in Texas probate court, especially when they feel treated unfairly. However, property transferred via a trust is not part of the probate estate.
This makes it virtually impossible for disgruntled relatives to contest your wishes or try to claim a portion of trust assets. Trusts help avoid bitter family fights over the estate.
6. Modify Plans Easily as Circumstances Change
Wills become locked at the time of death, but trusts can be updated. You can amend the trust terms anytime if your relationships, financial situation, or intentions change.
This flexibility allows you to modify your plans when needed rather than being stuck with an outdated will.
Putting Property Into a Trust is Easier Than You Think
Now that you know the many potential benefits of placing property into a trust, you may wonder how complicated the process is. We are here to tell you that it’s actually quite straightforward.
Here is an overview of the simple steps:
Work with an estate planning attorney to draft your trust agreement. We will help tailor it to your unique assets, intentions, and beneficiaries.
You will sign a new deed transferring your property into the trust. As the Grantor, you transfer ownership to yourself as the Trustee of the trust.
We record the deed with the county to officially document the new ownership by the trust.
Your dedicated trust attorney assists with any needed coordination with lenders, tax authorities, insurance, etc.
We strive to make the process hassle-free from start to finish. Don’t hesitate to reach out if we can answer any questions or provide a free trust consultation.
Types of Trusts for Real Property in Texas
The main kinds of trusts that can hold real estate in Texas include:
Revocable Living Trust: The most popular trust for property transfers in Texas. You retain complete control and can modify it anytime.
Irrevocable Trust: Removes assets from your taxable estate and provides creditor protection. It cannot be changed once created.
Testamentary Trust: Outlines management of assets and is created in your will, taking effect at death, and requires probate first to set it up.
Bypass/Credit Shelter Trust: Commonly used by married couples to double the federal estate tax exemptions for each spouse.
Spendthrift Trust: Protects inheritance from beneficiaries’ creditors and misuse by limiting their control.
Special Needs Trust: Holds assets to provide for disabled beneficiaries without affecting government benefits.
Charitable Trust: Leaves property to charity but allows the donor to retain income interest during life.
Land Trust: Holds real property anonymously while retaining control through the beneficial interest, which is the equitable right to receive profits from the property.
The most common voluntary trusts for real estate are revocable trusts, irrevocable, testamentary, and bypass trusts. Your Legacy Legal Care can help you determine the best trust option for your specific circumstances and goals.
Ensure Your Real Estate Is Handled as You Wish
Ultimately, trusts give you total control over your real estate. Your trustee will carry out your instructions for managing and distributing trust assets after your lifetime.
Without a trust, your property would pass via default intestacy laws, which may differ from your intentions. A customized trust allows you to ensure your real estate is handled exactly as you want.
Trusts offer significant advantages for Texans who want to maximize control and privacy over their property while minimizing legal fees. Consult a Texas estate planning attorney to craft a personalized trust providing the benefits you seek.
Take the Next Step to Protect Your Legacy With an Estate Planning Attorney
Get help from a Houston Estate Planning Lawyer putting a property into a trust in Texas. You worked hard to acquire your home and other real estate. Now, let’s make sure it stays in the family. A trust allows you to pass them to heirs securely and privately after your lifetime.
The skilled attorneys at Your Legacy Legal Care have decades of combined experience setting up customized trusts to meet our clients’ unique needs. If you’d like to learn more about which type of trust is right for your situation or to seek assistance with trust administration, we offer complimentary initial consultations.
Contact us today to schedule a call and implement your legacy plan. The time to prepare is now.