If you are considering creating a will or family trust in Texas, it is important to understand the differences between the two. A will is a document that outlines how an individual wants their property, assets, and other belongings to be distributed after death. On the other hand, a family trust is a legal entity created by an individual to provide financial security for their family after they pass away. Below, we will discuss each document in further detail as well as factors that may affect which you would like to include in your estate plan.
Should I Have a Will or Family Trust?
Both documents have important implications for estate planning in Texas. As we mentioned, a will is a written document that details your wishes about property division and other details after your passing. A will can also include instructions on guardianship of minor children, payment of debts and taxes, and designation of beneficiaries.
In Texas, wills must be in writing, signed by the testator (the person creating the will) or someone authorized on their behalf, and witnessed by two people who attest that the testator was of sound mind when signing the document. Furthermore, wills must meet certain requirements if they are to be probated in court and enforced, which is why you should enlist the help of an estate planning attorney when drafting your will.
A family trust is a legal entity set up by an individual (the grantor) to provide financial security for their family members after death. These trusts can be used for various purposes such as paying medical bills or providing education expenses for beneficiaries after the grantor's passing.
Similar to wills, family trusts must comply with certain requirements under Texas law if they are to be enforced by a court of law. The main difference between wills and family trusts is that with a trust, assets are transferred into it before the grantor's death; whereas with a will assets are transferred only after death through probate proceedings.
Each has its own pros and cons depending on your specific situation. However, it is important to note that even if you make a living trust you should still consider drafting a will. With a will, you can designate guardians for minors and account for property not transferred to your trust.
Pros & Cons of Establishing a Family Trust in Texas
An advantage of creating a family trust in Texas is that you have the ability to maintain control over your assets in the trust. Other benefits of having a family trust include:
-You can avoid probate court and reduce estate taxes. This means more of your estate will stay within the family instead of going to the government or legal fees.
-You maintain your privacy. Unlike wills, which are public records, trusts are not made public and remain private between those involved. This means that your estate planning remains confidential and out of the public eye.
-You can consider long-term financial security. A family trust can protect assets from creditors or lawsuits.
While there are many pros to establishing a family trust, there are a few cons to consider as well. The main con of establishing a family trust in Texas is that it can be quite costly upfront due to legal fees associated with setting up trusts.
Additionally, since trusts are governed by state law they must follow strict rules and regulations which may limit one’s flexibility when dealing with finances and estate planning needs. Lastly, if not established properly there could be unforeseen consequences such as having funds seized or paying more taxes than necessary due to misinterpretation or misunderstanding of the law.
Consult with Our Attorney
When it comes to estate planning in Texas there are several options available including wills and family trusts. It is important to understand both documents carefully so that you can make an informed decision when deciding which one is right for you and your family’s needs. Consulting with our experienced attorney can help ensure that your estate plan meets all state requirements so that it can be properly enforced when needed.
Backed by decades of experience, J. Roland Jeter, P.C. is here and equipped to help you or a loved one develop your estate plan. We can advise you on which document will best benefit you and help you understand your legal rights and options. Our firm handles a wide range of estate planning matters, including:
- Power of attorney
- Fiduciary duty matters
To get started with your estate plan and discuss your options, call 972.330.4050 or complete our online contact form. Let us help you make sure your wishes are known and honored and that your family is protected.