People create trusts for multiple different reasons. Some people want to structure the financial resources they leave for their children or grandchildren. Others want to make sure they can qualify for Medicaid if they need benefits as they get older. Some people may worry about creditors making claims against their estate or about how an estate tax could diminish what legacy they leave behind.
One of the most common reasons that people decide to create a trust as part of their estate plan specifically is to avoid probate proceedings. Will a trust let your family bypass probate court proceedings after you die?
Trusts don’t end all probate requirements but they do protect assets
Texas has specific probate rules. If you die with more than $75,000 in personal property, then the chances are good that your estate will have to go through probate before your family members can claim that property.
Certain assets, like life insurance, may not need to pass through probate, but most other assets will. A trust can help you keep certain property completely out of the probate process. By changing the ownership of those assets from you as an individual to the trust, you eliminate the obligation for probate administration of those assets.
Moving your biggest property, like your house, into a trust, can make estate administration easier. It can also reduce how much of your legacy goes to pay for probate proceedings.
Trusts do more than just help you avoid probate court
There are numerous benefits to using a trust as part of your estate plan. Just like the property in the trust won’t have to go through probate proceedings, it will likely not count against you for estate tax purposes.
If you go into debt in the last years of your life or require Medicaid to pay for intensive treatment or nursing home support, the property that you move into a trust will have protection from Medicaid recovery from the estate and creditor claims.
Provided that you structure the trust properly and name a trustee capable of managing the assets, a trust in your estate plan could help your loved ones connect with your property immediately after your death without the inconvenience and expense of probate court.