Will or living trust in Texas: which one your family actually needs

For many Texas families, a good will is enough

Many Texas families do not need a living trust. A will that names an independent executor usually keeps probate here fairly manageable, and assets such as retirement accounts, life insurance and payable-on-death accounts pass outside probate anyway. A revocable living trust earns its extra cost when you own real estate in another state, want the estate kept private, want someone to manage property smoothly if you become incapacitated, or have heirs who need long-term management of what they inherit.

My practice covers wills, trusts and probate, so I have no reason to steer anyone toward one or the other. The right choice depends on your family and your property. This guide explains how each works in Texas, the honest advantages of each, and the questions that usually decide it. It is general information; talk to a licensed Texas attorney about your own situation.

How each document works

A will is a set of instructions that takes effect only at death. It names who inherits, who serves as executor and who should raise minor children. To transfer property titled in your name alone, the will generally has to be admitted to probate, the court process TexasLawHelp.org describes as the procedure in which a judge determines whether a will is valid.

A revocable living trust is an arrangement you create during life. You transfer assets into the trust, usually serving as your own trustee, and you keep full control. Under Texas Property Code Section 112.051, a trust is revocable unless the document creating it expressly makes it irrevocable, so you can change or cancel it while you are alive. At your death or incapacity, a successor trustee you chose takes over and manages or distributes the trust property under its terms, without a court appointing anyone.

The catch is in the word transfer. A trust controls only what has actually been moved into it. Your house has to be deeded to the trust, accounts retitled, and beneficiary forms coordinated. Anything left outside usually passes under a short "pour-over" will, which may itself need probate.

Both documents need the same careful thinking about people. A will needs an executor and alternates; a trust needs a successor trustee and alternates. Either one should say who inherits, in what shares, and what happens if an heir dies first. The choice between them is about mechanics, not about whether your wishes are written down.

Why probate is less frightening here than its reputation

Much of the case for living trusts comes from states where probate is slow and closely supervised. Texas offers a streamlined path. Under Texas Estates Code Section 401.001, a person may provide in their will that no other action shall be had in the probate court beyond probating and recording the will and returning the required inventory. That is independent administration: the executor handles the estate with far less court supervision.

In my experience, a will that names an independent executor, waives bond and is properly self-proved makes probate a manageable process for most families, particularly when much of the estate passes by beneficiary designation. It is still a court process with costs and some delay, and it is still public. But for many families, it is not a reason on its own to build a trust.

Assets that skip probate either way

Before deciding, look at how much of your estate would go through probate at all. TexasLawHelp.org notes that some assets, such as insurance, retirement funds and jointly held property, pass outside probate. Many families find that the house is the only significant asset that would need a court process.

For that house, Texas also offers a transfer on death deed, which passes real estate to a named beneficiary at death without probate. It is not right for every family, and I cover the tradeoffs in a transfer on death deed for your Texas house.

• Life insurance with a living named beneficiary
• Retirement accounts such as 401(k)s and IRAs with a named beneficiary
• Bank accounts with a payable-on-death designation
• Property held with a right of survivorship
• Real estate covered by a recorded transfer on death deed

When a living trust earns its cost

There are real situations where I recommend a trust. In each one, the trust solves a problem a will cannot solve as well. If several of these apply to you, a trust-based plan deserves serious consideration.

Incapacity deserves a word of its own, because it is often overlooked. A will does nothing while you are alive. If you have a stroke or develop dementia, someone has to pay the bills and manage your property. A well-drafted durable power of attorney handles much of that for many families. A funded trust adds another layer: your successor trustee already has authority over the trust assets, and banks and title companies are used to dealing with trustees. For someone with significant real estate or a business, that smoother handoff can matter a great deal.

• Real estate in another state, which might otherwise need a separate probate proceeding there
• A strong preference for privacy, since a probated will becomes a court record
• A concern about incapacity, where a successor trustee can step in without a guardianship
• Heirs who need management for years, such as a child with special needs or a young adult
• A family where a contest is likely and a smooth handoff matters
• A business or rental properties that need uninterrupted management

When a will-based plan is the better fit

A will-based plan is usually simpler and less expensive to set up, and there is nothing to retitle. It fits well when most of your assets already pass by beneficiary designation, your property is in Texas, your family is straightforward and you are comfortable with an independent executor handling a modest court process.

A will can also do more than people think. It can create trusts for children or other heirs that begin at your death, holding a child's share until an age you choose and paying for education and support along the way. Those testamentary trusts give much of the protection families want for young heirs without the work of funding a living trust now. And if your situation changes later, a will-based plan can be converted to a trust-based plan without starting from scratch.

The cost comparison, honestly

A trust-based plan costs more at the start: the trust itself, a pour-over will, the powers of attorney and the work of moving assets into the trust. A will-based plan costs less now, and more of the work happens later, when the executor takes the will through probate. Neither is free in total.

So the real question is when you would rather the effort happen, and how much your particular family would struggle with a court process. I explain the factors that move the price of each in what a will or estate plan costs, and what moves the price.

The mistake that undoes most living trusts

The most common trust failure I see is an unfunded trust. Someone paid for a carefully drafted document, signed it and put it in a drawer, and never deeded the house or retitled the accounts. At death, the trust holds almost nothing, and the estate goes through probate anyway under the pour-over will. The family pays for both.

If you choose a trust, ask who is responsible for funding it and get a written list of every asset and what was done with it. Recheck that list whenever you buy property, open an account or refinance, because lenders sometimes require a house to be taken out of a trust and owners forget to put it back.

The opposite mistake is choosing a trust mainly because someone said probate is terrible. If a will with independent administration would serve your family well, a trust adds cost and upkeep without adding much. If you want to see what probate actually involves in Dallas County, read what probate involves after a parent dies.

Questions that usually settle it

When I meet with a family weighing this decision, a few questions usually make the answer clear. You can work through them at home before you talk to anyone. If most of your honest answers are no, a will-based plan is probably enough for you; if several are yes, a trust is worth discussing.

• Do you own real estate outside Texas?
• Would it bother you for your estate plan to become a public record?
• If you became incapacitated, would you want your property managed without any court involvement?
• Will any heir need someone managing their inheritance for many years?
• Do you expect anyone to challenge your plan?
• Do you own a business or rental property that cannot pause?

Talking it through with me

I practice alone from my office on Plano Road in the Lake Highlands area of Dallas, and you speak directly with me. In a first conversation I ask about your family and property, explain how a will-based plan and a trust-based plan would each work for you, and give you my recommendation and the cost of each.

Whichever you choose, the plan should include financial and medical powers of attorney and a directive to physicians, and your beneficiary forms should match the plan. For advice about your own situation, talk to a licensed Texas attorney who has heard the whole picture.

Questions people ask me