Business in estate planning practices tends to pick up after the kids go back to school. Many parents or grandparents come into the office absolutely convinced that they need a trust for their estate.
To this I say: Beware of the out-of-state advisor, the neighbor who has recently moved from California, or financial advisors marketing to congregations or neighborhoods with free dinners and sales pitches. Not all states are the same, and not all estate plans are the same.
In many states (such as California), probate is an expensive and lengthy process. Residents there almost always use revocable living trusts to avoid it. But in Texas, we have an easy, “independent” probate with very little court oversight and a whole lot of Executor autonomy. In fact, the cost of setting up a revocable living trust is often comparable to the cost of probate.
So why would you need a trust in Texas? Here are some reasons:
- If you are anticipating an incapacity, a Trustee of a trust will have better control of your assets than an agent under a financial power of attorney (FPOA);
- If you do not have family or friends to serve as your agent under an FPOA, banks will serve as trustees, but they won’t serve as FPOA agent;
- If you have a difficult distribution plan with various contingencies;
- If your beneficiaries need long-term trusts;
- If, as a couple, you have an estate that is around the estate tax exemption amount;
- If you have out-of-state property and want to avoid probate in another state; or
- If you are very sensitive to privacy and want to avoid having your Will distribution in the public record.
Attorney Kendra Rey is an attorney at Hammerle Morris Law Firm, a boutique law firm offering services in estate planning, probate, guardianship, business law, litigation, and real estate. Contact her at (972) 436-9300. This article does not constitute as legal advice.
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