How to Set Up a Living Trust in Texas: Steps, Cost, and What Not to Put In It
To set up a living trust in Texas, you decide what the trust should do, choose your beneficiaries and a trustee, sign a written trust agreement, and then move your assets into the trust. A revocable living trust lets you keep control of your property during your lifetime and can let the assets it holds pass to your family without probate. At The Patterson Law Firm, estate planning packages with a revocable living trust and a will start at $2,000.
This guide walks through each step in plain language, which assets usually stay outside a trust, and what affects the cost.
What Is a Revocable Living Trust?
A revocable living trust is a written arrangement you create during your lifetime. You transfer property into the trust and usually serve as your own trustee, so you keep managing your home, accounts, and investments as you do now. You can change or cancel the trust at any time while you have capacity.
The trust names a successor trustee who steps in if you become unable to manage your affairs or after you die. Assets titled in the name of the trust can then be managed or distributed under the trust's terms without a probate court proceeding. A trust is also generally not filed with the court, so its terms usually stay private.
How to Set Up a Living Trust in Texas, Step by Step
1. Decide What You Want the Trust to Do
Start with your goals. Common reasons Texans set up a living trust include keeping a home or rental property out of probate, planning for possible incapacity, providing for children or grandchildren over time, planning for a blended family, and leaving gifts to friends, partners, or charities.
2. Choose Your Beneficiaries
Beneficiaries are the people or organizations who receive the trust property. You can name family members, a partner, close friends, or charities, and you can set conditions or timing for distributions, such as staggered distributions for a young adult.
3. Choose Your Trustee and Successor Trustee
With a revocable trust, you are usually the first trustee. You also name at least one successor trustee to take over if you cannot act or after your death. This can be a trusted family member or friend, or a professional trustee or institution. Pick someone organized and willing to serve, and name a backup.
4. Choose the Type of Trust That Fits
Revocable living trust: the most common choice for avoiding probate and planning for incapacity. You keep control and can change the terms.
Irrevocable trust: generally cannot be changed once signed. Used for specific tax, asset, or benefits planning, and requires careful advice.
Special needs trust: provides for a loved one with a disability while protecting eligibility for public benefits. See special needs trusts in Texas.
Testamentary trust: created in your will and takes effect only after death, so it does not avoid probate.
5. Sign the Trust Agreement
Texas requires a trust involving real or personal property to be in writing and signed by the person creating it. Notarizing the trust is common practice and makes it easier for your trustee to use it with banks and title companies.
A living trust is usually signed along with a pour-over will, a durable power of attorney for finances, and a medical power of attorney. A trust covers your property, but it does not make health care decisions for you, so the medical documents still matter.
6. Fund the Trust
Funding means moving your assets into the trust's name. This is the step most often missed, and an unfunded trust does not keep those assets out of probate. Funding can include:
Signing and recording a new deed to put your home or other real estate into the trust
Retitling bank, brokerage, and investment accounts in the trust's name
Assigning personal property, such as furniture, jewelry, and collections, to the trust
Transferring a business interest to the name of the trust (which requires careful planning)
7. Review and Update It
Review your trust after major life events: marriage, divorce, a birth or adoption, a move, buying or selling a home, starting a business, or the death of a trustee or beneficiary. Because the trust is revocable, updating it is usually straightforward.
What Assets Should Not Be in a Trust in Texas?
Some assets are better handled outside the trust, usually through beneficiary designations:
Retirement accounts (401(k)s, IRAs): transferring ownership to a trust can be treated as a withdrawal with tax consequences. Instead, people often name the Trust as the account's payable-on-death beneficiary, though this is not permitted in all cases.
Life insurance: this passes as specified in the plan's beneficiary designation. You can name a trust as the beneficiary when that fits your plan.
Vehicles: Texas allows a right-of-survivorship agreement for vehicles through the Texas DMV, which is often simpler than retitling a car.
Jointly owned property with right of survivorship: passes automatically to the surviving co-owner outside of probate, and retitling requires the co-owner's signature.
Beneficiary designations on these assets usually override your trust and your will, so check them whenever you update your plan. For other ways to pass a home outside probate, see how to pass real estate to children in Texas without probate.
How Much Does a Living Trust Cost in Texas?
At The Patterson Law Firm, estate planning packages with a revocable living trust and a will start at $2,000. The total depends on how many properties you own, whether you have business interests, blended family or special needs planning, and how many related documents you need. There may also be small county recording fees for deeds. If you choose a professional trustee, they charge their own fees to manage the trust. For a full breakdown, see how much estate planning costs in Dallas.
Do I Still Need a Will If I Have a Trust?
Yes. A pour-over will catches any assets left outside the trust and directs them into it. If you are still deciding which you need, read Do I need a trust or just a will in Texas.
Next Steps
If you are deciding between a will and a trust, or you already have a trust and aren't sure it's funded, you can schedule a free consultation with The Patterson Law Firm.
Disclaimer: This blog is made available by the Caleb Patterson Law Firm, PLLC, to the general public for educational purposes only. Specifically, the entries contained within this blog are designed to provide the general public with general information concerning Texas law. The blog does not provide specific legal advice and does not create an attorney-client relationship between the reader and the Caleb Patterson Law Firm, PLLC. This blog is not an effective or appropriate substitute for obtaining legal advice from a qualified attorney licensed in your state with experience in your practice area or forum of law.
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