Living Trust Texas - "Tax Us" Is Common In Texas Trusts
December 22, 2004
By Kathy Curtis
Is every trust protected from probate? No. In spite
what you may have heard, a living trust Texas-style
is not a sure bet against probate. Has The Big Bad
Wolf formed a friendship with the Texas probate system?
For now in the Lone Star State, probate is permitted
to take a percentage of an owner's worth upon the
owner's passing. Texas is one of the few states in
the United States that still probates trusts.
A Comfortable Way To Set Up A Plan
Texas' living trusts are sometimes an unnecessary estate-planning
document. Attorneys will attest to this truth, depending on the
trust's value and the grantor's circumstances. For many Texans,
a will suffices. Since probate is almost guaranteed, sometimes a
Texan skips this document and saves the costs associated with setting
up the plan. Still, some Texans feel much more comfortable knowing
who is getting what and how his possessions will be distributed.
A will doesn't always guarantee this level of comfort.
Your will's language can sometimes do the trick. Texas has a very
simple procedure - "independent administration" - to ensure
probate is fast and inexpensive. In most circumstances, this procedure
is completed in three to 12 months.
Fallacies
Many seniors in Texas fall prey to living will mills and scams.
In fact, this problem is so prevalent that the Bar of Texas (http://www.texasbar.com)
is working hard to get the word out to seniors and their caretakers
about false messages and other fears employed by those who push
living trusts. Some of the more common fallacies involve taxes,
contesting, and entitlement.
§ In Texas, taxes are not avoidable through a living will.
A Texan will still have to pay estate or income taxes. A will
may offer the same estate tax-saving provisions as a trust.
§ Contesting a living trust may still happen while the person
is alive or after passing. A Texas enacted living trust may help
support decisions made in a Texas will.
§ Entitlement identifies who gets what and how much of each
trusted asset is divided. In Texas, many times, a trust isn't
needed for certain assets. If beneficiaries can agree ahead of
time about assigning ownership, these items can be transferred
without the need of a trust or court decisions. Some of these
items include jewelry, furniture, life insurance, pension benefits,
and joint bank accounts containing provisions for right of survivorship.
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