Wills and trusts are both important legal tools used to transfer property to your loved ones after you pass away. If you are thinking about drafting your estate plan, you may have wondered whether you need a will, a trust, or both. Both of these legal documents have many benefits, and it is important to understand their purposes so you can determine which one is right for you. Below, our Houston estate planning lawyer explains more about wills and trusts so you can make the decision right for you.

What is a Will?

A will is a legal document that allows you to express your wishes regarding who should inherit your property upon your death. You are not required to draft a will. If you do not, however, your property will be distributed according to the intestate laws in Texas. Primarily, these laws divide your property between your spouse and your children. While these laws may align with your wishes, that is not always the case. By drafting a will, you can specify a different distribution, including giving to charity, leaving property for friends or other family members, or even disinheriting a child.

After you pass away, your executor is required to submit your will with the probate court. This begins the probate process, during which your estate will be managed and distributed according to your wishes. One of the first steps of the probate process is proving the will, which essentially confirms its validity. This may involve a judge interviewing witnesses and obtaining an understanding of your mental state at the time the will was drafted.

Once the will has been proved, the court will authorize the executor to pay your taxes, expenses, and bills with the proceeds in the estate. After these expenses have been paid, the executor will then distribute your property according to the instructions in your will.

Wills have a larger purpose than just ensuring your property is distributed according to your wishes. In your will, you can also name a guardian for your younger children who will raise them and care for them. Without a will, the court will make a decision regarding guardianship for your child, and the person the court chooses may also not align with your wishes.

What is a Trust?

Trusts are another option that allow you to transfer your property after you pass away. You can draft a testamentary trust or a living trust. A testamentary trust transfers your property through a provision within your will. A living trust allows you to fund the trust by transferring property to it. All trusts are managed by a trustee, who is usually the person who created it. You will then name a successor trustee who will distribute the property within the trust according to your wishes upon your death.

To draft a trust, you must execute a document that contains instructions for how the property within the trust should be transferred. You must also transfer property to the trust properly, which generally requires you to retitle the assets. The property then technically belongs to the trust and not you. While you can still manage the property within a trust during your lifetime, it will not be subject to probate because you are not the legal owner.

As the person who creates the trust, you are known as the ‘grantor’ or the ‘settlor.’ The person who manages the trust is known as the ‘trustee.’ Trustees have certain legal obligations, such as following the instructions within the trust and distributing property to the beneficiaries named in the trust.

You can create either an irrevocable or revocable trust. An irrevocable trust cannot be changed once it is executed, while revocable trusts can be modified at any time. Revocable trusts also allow you to designate yourself as the trustee and beneficiary of the trust throughout your lifetime.

Creating a trust is more complex than drafting a will, and there are also more upfront costs. It is always advised that you work with a Houston estate planning lawyer who can ensure no mistakes are made so your wishes are respected.

A Will or Trust: Which is Right for You?

When you draft a will, you can outline how you want your property distributed without the need to transfer ownership to a trustee. A will may make it easier to control your own property during your lifetime. For example, you can leave half of your estate to your spouse and half to your child after you pass away, but you still legally own the property while you are alive.

When executing a trust, you must transfer property into the trust. Issues can arise if you forget to transfer a title or include an asset. With a will, you are not required to change ownership of the property. Wills are also often less expensive to execute because they are simpler to prepare.

On the other hand, any assets you place into a trust are not subject to the probate process. Your successor trustee can distribute the property automatically according to the instructions contained within the trust. This can help your loved ones avoid the contest to your will and receive their inheritance more quickly.

Additionally, a trust allows your loved ones access to your property if you become disabled or incapacitated. You can arrange a trust so your trustee has the authority to manage the assets if you are unable to do so. You can also include a ‘pour-over’ provision in your will that transfers property into the trust upon your death.

Our Estate Planning Lawyer in Houston Provides Sound Legal Advice

While all adults should draft a will, only a Houston estate planning lawyer can determine if a trust is right for you. At Integrity Law Group, PLLC, our experienced attorney can review your situation, determine what documents you need, and ensure they are executed properly so you are fully protected. Call us now at (832) 263-1828 or fill out our online form to schedule a consultation and learn more about how we can help.

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