A revocable living trust is a document that outlines what happens to your assets in the event of your death.
The assets listed in your trust may include property, bank accounts and other financials, such as retirement plans and investments.
Creating a revocable living trust
The steps for creating a revocable living trust in Texas include:
- Decide between a shared or individual trust.
- List the assets you plan to include in your trust.
- Decide on a designated trustee to oversee the trust after your passing.
- Name beneficiaries for each asset.
- Create the document and sign in the presence of a notary public.
Once your trust document is complete, you need to adjust any titles of assets listed in the trust to reflect your ownership as trustee.
Comparing a revocable and an irrevocable living trust
Revocable and irrevocable living trusts essentially do the same thing. Both lay down the framework for the distribution of property once the owner of the trust passes. The primary difference is a revocable trust is subject to change at any time should the grantor decide to alter it. This is often the better choice because you bypass probate and safeguard your decisions.
An irrevocable trust is, as the name implies, unchangeable. No one, including the grantor, can change an irrevocable trust once signed and notarized. As a grantor, if you decide to distribute your assets through an irrevocable trust, you basically forfeit your right to change your mind about who receives your assets.
Deciding between a revocable or irrevocable trust is a personal decision and requires careful consideration.