WILLS, TRUSTS AND ESTATES
There are two primary methods by which people arrange for the disposition of their property on death: Wills and Trusts. In Texas, wills are the most common means of disposing of property in the event of death.
What is a Will?
“A will is generally defined as an instrument by which a person makes a disposition of his property to take effect at his death, and which by its own nature is ambulatory and revocable during his lifetime.” In re Estate of Brown, 507 S.W.2d 801 (Tex. Civ. App.–Dallas 1974). You can look at a will as a set of directions that prescribes who is entitled to receive your property after you die. A properly drawn will appoints an executor–that is, the person who is designated to be in charge of the estate, of concluding the deceased person’s business and financial affairs, paying the
deceased person’s legal debts and, ultimately, of distributing the property to the persons whom the will directs. A person can revoke or revise his or her will before death. After someone who makes a will dies, it will be necessary to “probate” or establish the validity of the will in probate court, and the executor is the person responsible for commencing the probate court proceedings.
All of the property that is transferred under the terms of the will is referred to as the “estate” or the “probate estate.”
What is a Trust?
A trust is a legal arrangement by which property is transferred to a person (the “trustee”) who then manages or administers that property for the benefit of another (the “beneficiary”). A trust often contains provisions that dispose of the trust property on the death of the beneficiary in much the same manner as a will, with the exception that a probate court proceeding is not required in order to administer the trust estate or distribute the property to the persons identified in the trust instrument after the death of the beneficiary. A trust can be either revocable or irrevocable. A revocable trust can be terminated or modified anytime during the lifetime of the person who created it, at the choice of that person. An irrevocable trust cannot be terminated or modified by the creator’s choice; it may be terminated or modified under certain conditions that the law prescribes, although generally only with court approval.
All of the property transferred to and held by the trustee is referred to as the trust estate.