Four Good Reasons to Have a Trust

Often clients ask me the reasons they should consider or  have a Trust.   I have outlined the four best reasons that I have encountered in my experience.  They are:

  1. Economy
  2. Efficiency
  3. Privacy
  4. Protection

Economy – Money

The cost to set up a Trust while you are alive  is  less than the cost of a future probate.  If the trust is a joint revocable living trust for two people, then the one trust could avoid the cost of two future probates.

The upfront cost to create a Will is generally less.  However, to probate a Will, the assistance of an attorney is needed in the state of Texas.  The legal  fees to probate a Will include the attorney’s fees as well as the fees associated with the probate.

Efficiency – Time

A Trustee, or someone who is experienced in these matters, may be able to do all the steps with a minimum of assistance from paid professionals.  The process can be very straightforward with no court proceedings necessary, and can be done at the convenience of the Trustee.

To probate a Will,  the client is required to appear in  court after filing an application and waiting a certain period of time.  Then there are procedural steps which can take up to six months, or sometimes more.

Privacy – Public record or not?

A Trust is more private than a Will.  Only the Trustmakers need to know the contents of the trust  and what assets are owned by the trust. Once the Trustmakers are gone, only the Trustee and beneficiary need know the contents of the trust.  The public at large will have no access to the terms of the trust and there is no public inventory of assets.

A Will is less private, due to the fact that once a Will is submitted to the court; it becomes a part of the public record.  If there are beneficiaries named or provisions that the client would rather keep private, they will be public once the Will is probated.  Also, if there is a need for an inventory of the estate, it becomes a part of the public record.  Prying eyes can see who the beneficiaries are and what they inherited.

Protection – upon incapacity

If a Trustmaker becomes incapacitated, either temporarily or permanently, a trust can act as a “super” power of attorney.  A trust can help avoid a guardianship which can be cumbersome and costly.  The Trustee of the trust can continue to handle any assets in the trust until the Trustmaker is well again, or for the remainder of the Trustmaker’s life, if necessary.

With a Will, clients rely on powers of attorney that agents may use to handle accounts and assets for the incapacitated client. But the POA is dependent upon the documents being accepted by the bank or other financial institution.  If the power of attorney is refused for any reason, and the client is incapacitated, he or she cannot execute a new one, leaving the agent without recourse except a guardianship.

A Trust often serves the clients and their families with Economy, Efficiency, Privacy and Protection.

For more information or to consult us about a trust contact us.