What You Should Know About Real Estate Trusts in Houston

Planning ahead for the future — especially when it comes to what happens after a loved one passes — can make a difficult time far less overwhelming. If you’re the one preparing your estate, or you’re helping a parent or family member plan theirs, a trust can offer peace of mind and protection.

Whether you’re trying to avoid probate, protect your heirs, or simplify the process of passing down property, understanding how real estate trusts work in Houston is an important first step.

Why Real Estate Trusts Matter

Placing a home into a trust removes it from your personal ownership and places it under the care of a trustee, which can be you or someone you choose. This shift offers several key benefits for your heirs:

• Avoids probate — saving months (or even years) of court involvement
• Protects from creditors
• Offers privacy, since a trust doesn’t become public record like probate does
• May reduce gift or estate taxes

In Texas, probate can be time-consuming and expensive. It requires court supervision, potential creditor claims, and legal steps that slow down the ability to sell or transfer a property. A trust allows your beneficiaries to bypass much of that. If you’re unfamiliar with how probate works or what it involves, you can learn more about the Houston probate process and how to sell a house during it in our full guide.

Understanding Gift and Estate Tax Implications

As of 2021, the federal lifetime exclusion for transferring assets tax-free was $11.7 million per person and $23.4 million for married couples. These thresholds are adjusted annually for inflation, and anything above them may be taxed.

Here’s what that means in practice:

• If your estate stays below that amount, your heirs likely won’t owe federal gift or estate taxes
• If your estate exceeds those thresholds, a trust can help reduce the taxable portion
• Trusts can help your heirs save on gift taxes, which may range from 8% to 40%
• In many cases, the gifter pays the tax, not the recipient

Trusts can also be used to limit access to funds, protect assets from creditors, and structure how your estate is passed on.

Setting Up a Trust in Houston

Not all trusts are the same — and that’s a good thing. You can tailor a trust to your specific goals, family dynamics, or long-term wishes. Here are a few common examples:

• Revocable Trust: Can be changed or canceled during your lifetime. Provides flexibility and avoids probate but doesn’t protect against estate taxes or creditors.
• Irrevocable Trust: Cannot be altered once set up. Offers stronger protection and may reduce estate taxes.
• Special Needs Trust: Provides supplemental income to a beneficiary without affecting their eligibility for assistance programs.
• Spendthrift Trust: Protects a financially irresponsible heir from spending their inheritance all at once or having it seized by creditors.

To get started, you’ll want to:

1. Take inventory of your assets, including real estate
2. Gather legal documents like your deed, mortgage info, and any existing estate plans
3. Choose a trustee you trust to handle things when the time comes
4. Work with a qualified attorney or legal service to create and file the trust
5. Transfer ownership of the property into the trust, updating the deed to reflect your role as trustee

Your name and the date of the trust should appear exactly on the title as it appears in the trust document.

Selling a House in a Trust After a Loved One Passes?

At TX Cash Home Buyers, we work with families across Houston who need to sell a home after the loss of a loved one — especially when the property is held in a trust or going through probate. If you’re looking for a quick, low-stress solution, we can make a fair cash offer and close in just a matter of days or weeks.

We understand how sensitive this time can be. If you have questions, our team is here to help.

Send us a message or call TX Cash Home Buyers at (281) 595-7550 to learn more about your options.