Many Texas residents are familiar with the fact that a living trust is helpful in avoiding the probate process. In fact, you’ll find living trusts touted all the time at retirement seminars. However, a living trust isn’t always the best option for everyone.
What is a living trust?
Estate planning can involve using a living trust. Also coined a revocable trust, this type of legal arrangement allows you to list the heirs whom you want to receive your assets. Unlike a will where you still retain ownership of your assets until you die, a living trust requires you to give direct ownership of your asset to the trust. Your attorney may help you formally retitle your chosen assets into a trust.
With a living trust, you can still manage the assets in the trust while you’re alive. You can also choose to revoke the trust at any time before your passing. The main reason that a living trust was invented was to allow your beneficiaries to avoid the probate process.
What is probate?
Probate is defined as a legal process by which a person’s will is validated. Once it’s validated, the executor is in charge of paying off the creditors that the deceased person owed money to. Once creditors are paid, the listed heirs in a will can receive the assets that they’re entitled to. This process can take a couple of months up to a couple of years depending on the size of a person’s estate.
A living trust can be a great alternative to a traditional will. However, it can be costly and unnecessary for those who don’t have a lot of assets. If you’re unsure whether you should go through the trouble of setting up a living trust, you should contact an attorney to assist you with your decision.