Most people don't want to think about what is going to happen to their personal property when they die. For this reason, estate planning and the questions that arise from the process are usually the last thing on any Texas resident's mind. Nevertheless, the question of whether one needs to set up a trust versus using a traditional will is one that may need to be answered.
A trust, in so many words, is a financial basket that contains one's assets inside it. The trust holds those assets on behalf of a third-party beneficiary. The management of the trust is overseen by a trustee.
Trusts created while an individual is still alive are called living trusts. Typically, the owner of a living trust serves as both the beneficiary and the trustee. While forming the trust, the owner designates how the assets contained inside it will be distributed following the owner's death. A will, on the other hand, is a document that details how an individual's estate shall be distributed following his or her death.
Many individuals face the question of whether a will or a trust is better for them. Deciding between the two is generally a matter of one's family structure, one's assets and how much privacy and control one wishes to exert over the distribution of those assets. By using a trust, for example, one can leave assets to a minor while dictating the specifics of how those assets will be distributed over a period of years or even decades. Estate tax issues may also come into play, and a trust may serve to provide more protection from tax liabilities.
Ultimately, an individual's net worth, personal background, needs, goals and other factors can be examined to determine the best possible solution for their estate planning needs in Texas. Indeed, some individuals may even want to leave a portion of their assets to be reserved for the care of a beloved pet. A wide variety of solutions can be created, depending on one's unique situation. The most important point to remember, however, is that estate planning is always best completed now rather than later.
Source: forbes.com, Wills vs. Trusts: What's Best For Retirees?, Thomas and Robert Fross, Feb. 18, 2014