A living trust in Texas, like other states, is a tool for distributing assets after death. By creating a trust and conveying title to her assets, a settlor -- trust creator -- can keep them out of her estate so that her heirs don't have to wait on probate. Texas laws for creating, modifying, operating and terminating trusts are found in Chapter 112 of the Texas Property Code.
A settlor can create a trust by transferring title to someone else as trustee, or by making a declaration that the settlor himself now holds title as trustee. The trust requires written proof that it exists to be enforceable, with a few exceptions, such as if the trust holds only personal property rather than real property. A trust must own some assets to be legally valid in Texas. A settlor can place any property in a living trust that he could pass on in his will.
Operating a Trust
The trustee can be any person or business that can legally take and transfer property title. If the trustee is a corporation, it must be one allowed to act as a trustee in Texas. Beneficiaries and settlors can both be trustees. The settlor can't simply appoint a trustee; a proposed trustee can refuse the position. If the alternate trustee also refuses, or there is no alternate, a Texas court will pick a trustee.
A settlor can modify a trust unless the trust documents state specifically that the trust is irrevocable. If the settlor created a trust by a written document, she has to modify it in writing as well. If the modification requires new duties of the trustee, the settlor must have the trustee's consent for the change. The settlor is free to add more property to the trust, but she must have the trustee's consent to do this.
Pros and Cons
The main benefit of a living trust is to speed the settlor's assets past probate. Texas attorney Dianne Reis says on her website that in Texas, if the will is written properly, probate takes only about three months, so the living trust doesn't save much time. Another advantage of trusts, however, is that unlike wills, trusts aren't part of the public record. Trusts are also useful if you have real estate in several states. With a will, the properties will have to go through probate in each state, but not with a trust.