Living Trust Vs Last Will in Texas

By Joseph Scrofano

Probating a will can be a time-consuming and costly process. In addition, all probate costs are paid from the assets of the probated estate. Accordingly, probate can effectively drain some of the assets of the estate, leaving less available for the beneficiaries. Therefore, a common alternative to a last will and testament is a living trust. In Texas, state laws govern the requirements for both a will and a living trust.

Difference in Terms

Each legal instrument has different terms. With a living trust, the estate owner (and person drafting the document) is referred to as a “settlor.” The settlor transfers his assets to the living trust. Typically, the settlor names himself as the trustee, or person in charge of the assets. The settlor will usually appoint a successor trustee, who will assert control over the assets upon the settlor’s death or incapacitation. With a will, the person drafting the instrument and holding the assets is called a “testator.” The testator typically appoints a personal representative who will probate the will upon the testator’s death. Upon death, the testator is called a “decedent.”

Difference in Probate

A major difference between a living trust and will is that a will must go through probate. Probate is a legal proceeding in which the court verifies the will’s authenticity and oversees the personal representative as she administers the estate. The personal representative must take an inventory of the estate, pay all debts and taxes, and then distribute the estate’s assets following the will’s directions. A living trust does not have to be probated. Accordingly, the successor trustee transfers the trust assets based on the conditions the settlor set out in the trust’s declaration.

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Difference in Privacy

In Texas, once a will goes to probate, it becomes a public record. While privacy may not be a paramount concern for all estate holders, others regard privacy as important. The will, the estate inventory and all relevant court documents become public. For individuals who value privacy in the administration of their estate, a living trust may solve this issue.

Difference in Challenges

Generally, it may be more difficult for an heir to challenge a living trust than to challenge a will. For example, if an heir challenged the terms of a living trust, the settlor can testify on her own behalf. This idea is not possible during probate because the estate owner has passed away by the time the will goes to probate.

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What Is The Difference Between a Living Trust and a Last Will in North Carolina
 

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What Are the Elements of a Family Trust?

A family trust is perhaps the most common type of trust created today. As its name suggests, a family trust is designed primarily to pass property to family members upon the death of the person who created the trust. A family trust allows a degree of flexibility not otherwise offered by a will, with the additional benefit of usually avoiding probate. A family trust must be carefully drafted to ensure each of the required elements is satisfied.

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