Make a Living Trust in Texas

If you're a resident of Texas and trying to decide whether you need a living trust, you might be wondering what to take into consideration. What happens to your property under Texas laws if you don't have a trust? When might you want a living trust? How do you make a living trust? Below is an introduction to what a living trust does and a discussion of whether it makes sense for your situation.

What Is a Living Trust?

A "living" trust (also called an "inter vivos" trust) is simply a trust you create while you're alive. The beneficiaries you name in your living trust receive the trust property when you die. You could instead use a will, but wills must go through probate—the court process that oversees the transfer of your property to your beneficiaries.

Many people create a revocable living trust as part of their estate plan. You can modify or revoke (cancel) this type of trust at any time. Typically, you'll name yourself as the "trustee" of your trust. This means that while you're alive, you retain control of the trust and its property. In your trust document, you'll also name a "successor trustee" to take over and manage the trust after you die; this person will distribute the property in the trust to your beneficiaries. (If you create a shared living trust, as is often done by married couples, then your successor trustee would assume control after both spouses have died.)

In contrast, irrevocable trusts can't be revoked or modified after they're signed. Irrevocable trusts can be useful tools for specific goals, like reducing taxes, but they require giving up ownership and control of trust property.

Do I Need a Living Trust in Texas?

When you set up a living trust to transfer your property to your loved ones after your death, you can potentially save them a lot of time, hassle, and money. Property left through a will (rather than a living trust) might be tied up for months or even years in probate court, and could involve court costs and lawyers' fees. By contrast, property left through a trust can be distributed to your beneficiaries almost immediately, and often without the need for an attorney.

Some states have fully adopted a model law called the Uniform Probate Code, which streamlines the probate process, but Texas isn't one of these states. However, Texas offers the following simplified probate processes for "small" estates:

• Small estate affidavit. Your inheritors can apply to skip the probate process altogether and use a "small estate affidavit" to claim property if the deceased person didn't have a will and the value of the estate (excluding homestead property and any exempt property) is $75,000 or less. (Tex. Est. Code § 205.001 (2024).)
• Summary proceedings for small estates. Your estate can also qualify for a probate shortcut called "summary proceedings for small estates" if the value of your estate doesn't exceed the value of homestead property, exempt property, the family allowance, and what's owed to certain creditors. (Tex. Est. Code § 354.001 (2024).)
• Order of no administration. Your surviving spouse and minor children can skip probate by asking for an order of no administration. This order only is available if the value of the estate isn't worth more than the statutory family allowance that your spouse and children are entitled to. (Tex. Est. Code § 451.001 (2024).)
• Muniment of title. Your estate can qualify for "muniment of title," a process that skips much of the probate process and allows assets to be quickly transferred to inheritors. To qualify for muniment of title, the deceased person must have left a will and the estate must have no unpaid debts, except for debts secured by real estate (for instance, a mortgage). (Tex. Est. Code § 257.001 (2024).)
• Independent administration. Lastly, your estate can also use a shortcut called "independent administration"—which is essentially probate but without court supervision—if your will requests independent administration or all of your inheritors agree to independent administration. (Tex. Est. Code §§ 401.001, 401.002, 401.003 (2024).)

If your estate qualifies for one of these probate shortcuts, the probate process will likely be quick, straightforward, and relatively inexpensive. So you might not need to worry about making a living trust just to avoid probate.

Additionally, in Texas, you can transfer real property using a transfer-on-death deed; this can keep your home out of probate without using a living trust. But if you have other significant assets you'd like to keep out of probate, a living trust can be a good solution. (Tex. Est. Code § 114.051 (2024).)

In Texas, If I Make a Living Trust, Do I Still Need a Will?

Yes, you'll still need a will. This might seem confusing—isn't the point of a living trust to avoid needing a will? Yes, it is, and your will might never be used. But you should still write one, for one or both of the following reasons:

• Designating a guardian for minor children. You can't use a trust to name a guardian for your minor children. For this reason alone, if you have minor children, you should write a will that names the guardian.
• Accounting for property that you haven't transferred to your trust. It happens all the time—people create a trust and forget to formally transfer property to the trust (for example, they never get around to changing the deed on their house). Or, people buy or inherit property after they've set up their trust, and forget or don't know to take ownership as the trustee of their trust. Either way, the property won't be distributed according to the terms of the trust. You should have a will as a backup to dictate how to distribute assets that aren't in the trust.

If you don't have a will, any property that isn't transferred by your living trust or other method (such as joint tenancy) will go to your closest relatives as determined by Texas state law.

Can a Living Trust Reduce Estate Tax in Texas?

Probably not. But most people don't need to worry about federal estate taxes anyway because the federal estate tax is levied only on estates worth more than $13.61 million (for deaths in 2024). Texas doesn't have its own estate tax.

That said, if you have an estate worth more than $13.61 million—or you and your spouse have a combined estate of close to $27.22 million—you might be able to use a more complicated trust (such as an AB trust) to reduce or avoid federal estate taxes.

How Do I Make a Living Trust in Texas?

To make a living trust in Texas, you:

1. Choose whether to make an individual or shared trust.
2. Decide what property to include in the trust.
3. Choose a successor trustee.
4. Decide who will be the trust's beneficiaries—that is, who will get the trust property.
5. Create the trust document. You can get help from an attorney or use WillMaker & Trust (see below).
6. Sign the document in front of a notary public.
7. Change the title of any trust property that has a title document—such as your house or car—to reflect that you now own the property as trustee of the trust.

You can use WillMaker & Trust to make a living trust using your computer. It has a simple interview format that allows you to complete the trust at your own pace, and it gives you lots of legal and practical help along the way. Based on your responses, the program produces a living trust document customized for you and your situation. With WillMaker & Trust, you can also make a will, powers of attorney, health care directives, transfer on death deeds, and many other useful documents. Use it just for yourself or for your entire family.

For more on Texas estate planning issues, see Texas Estate Planning.