If you have been researching estate planning in Texas, you have likely encountered a pervasive narrative: “Texas probate is easy, so a simple Will is all you need.”
While it is true that Texas has an independent administration process that is better than some other states, “better” does not necessarily mean “efficient” or “private.” Especially for families with assets exceeding $75,000 in value, the reality often looks quite different.
Thankfully, effective estate planning avoids the need for probate court entirely. At Duffley Law, we create estate plans, often using tools like living trusts, that avoid probate and limit the need for the court in the event something happens.
Why Wills Can Be Expensive
A will generally must be approved by a probate court.
Consider the math of a typical Texas estate administration:
- Will-Based Plan: Lower upfront drafting cost, but probate administration often costs between $4,000 and $6,000 in legal fees and court costs after you pass in many cases, and over $10,000 in contested or complex cases.
- Trust-Based Plan: Higher upfront investment (typically flat-fee with us), but there is no requirement to go through probate court for assets inside of the trust.
In many ways, estate planning is a long-term financial strategy. Effective planning is often like pre-paying for peace of mind and saving your family thousands of dollars (and months of time) on the back end.
Managing Incapacity Without the Court
How do you manage if you are incapacitated, unable to make decisions due to illness or injury?
A living trust can be a powerful defensive tool in this situation as well.
If you become incapacitated and you’re relying solely on a will, which only takes effect after you pass away, your family’s only recourse is typically a guardianship proceeding with a court.
In Texas, guardianship cases are:
- Public: Your medical and financial status often become public record.
- Expensive: It often requires multiple attorneys (one for the applicant, one appointed by the court for the incapacitated person) and significant legal fees. Fees and costs can exceed $10,000 in many cases.
- Restrictive: The court must approve appointments following strict rules.
A fully funded revocable living trust can avoid the need for this. As the trustee of the trust, you control your assets while you are able. If you become incapacitated, your successor trustee (someone you chose, not someone a judge appoints) steps in immediately to manage the assets in the trust.
This transition is vital for how a revocable living trust manages assets during incapacity, confirming your bills are paid and your care is funded without a single court hearing.
Protecting Your Privacy
In the digital age, privacy is a premium asset.
- Wills: When a will is probated, it is filed with the county clerk. It generally becomes a public record. In many counties, other people can download it and see exactly who your beneficiaries are and what you wished them to receive. Your estate’s assets are often made public as well via a public inventory filing.
- Trusts: A living trust is a private contract. It is not filed with the court. The distribution of your assets, the identity of your beneficiaries, and the extent of your wealth remain a private family matter with an effective trust-based plan.
For many business owners and families who value discretion, this privacy feature is often a deciding factor to create a trust-based plan.
Why Trusts Fail
A trust is like a bucket. It only protects what you put inside it. A common reason trusts fail in Texas isn’t necessarily bad drafting, but instead it’s bad “funding.”
Funding is the process of re-titling your assets into the name of your trust. As an example, if you sign your trust documents but forget to deed your house into the trust, that house still has to go through probate.
Here’s a video explaining the importance of funding a trust:
EMBED: https://youtu.be/JdmDzDipvGE?si=TP6odE_17-KzmuDe
At Duffley Law, we guide our clients through transferring assets into Texas living Trusts. We work to do the heavy lifting upfront so a plan works as intended when it matters most.
Frequently Asked Questions
Does a living trust avoid estate taxes?
For the vast majority of families, the primary goal of a revocable living trust is to avoid probate and create a smooth transfer of assets, not necessarily to avoid federal estate taxes (which currently only apply to estates over roughly $15 million per individual). On the other hand, irrevocable trusts can be used in some cases to limit estate tax exposure.
Is it hard to manage a trust while I’m alive?
For most situations, not at all. You are typically the Trustee. You buy, sell, spend, and invest exactly as you do now. For most living trusts, there is no separate tax ID number required while you are alive, and you file your taxes in practically the same way you always have. The only difference is the official name listed as owning the asset.
Who should I choose to manage my Trust?
Selecting the right person is critical. Financial literacy, temperament, honesty, and integrity are all relevant factors, though everyone’s situation is different and there’s no one size fits all choice. We often help our client’s consider different candidates for serving as future trustee of a Texas living trust.
Making the Decision with Confidence
If you’re like many of the people we speak with each day, you might be considering a living trust because you want to protect what you have built and make sure your family is cared for without needing to waste time and money going through court if something happens to you.
At Duffley Law, we operate with a core value that we are the last line of defense for our clients. We value accuracy, and we believe in transparent, flat-fee pricing whenever possible so you never have to guess what your plan will cost to create.
If you are ready to build a robust plan that seeks to avoid probate while securing your legacy, we are here to guide you.
Feel free to contact our team at Duffley Law to schedule your strategy session so we can better understand your personal goals and we’ll see how we can best assist.