What is a Trust?

Elite Realty Group Resources

The Most Common Trusts in Texas

A trust can help organize property, protect beneficiaries, preserve privacy, and establish how assets are managed or transferred.

The right structure depends on the property involved, family needs, tax considerations, creditor concerns, and long-term estate-planning goals.

Explore Trust Types

Texas Estate Planning

The trust itself is only part of the plan. Property must be titled, funded, and administered correctly for the intended strategy to work.

Trust Structures

Select a trust to review its purpose and common uses.

Flexible Estate Planning

Revocable Living Trust

Common Starting Point

Often used by Texas homeowners who want continuity, privacy, and a more organized transfer of trust-owned property.

The person creating the trust generally retains control during life and may amend or revoke the trust while legally competent.

Potential Benefits

May help trust-owned assets avoid probate
Can preserve greater family privacy
Allows successor management during incapacity
Can generally be amended or revoked

Often Considered By

Families
Homeowners
Owners of multiple properties
People seeking continuity of management

Long-Term Planning

Irrevocable Trust

Limited Flexibility

An irrevocable trust is generally designed for planning goals that require the creator to surrender certain ownership rights or control.

Once established, changing or terminating the trust may require beneficiary consent, statutory procedures, court involvement, or other legal authority.

Common Uses

Asset-protection planning
Medicaid planning
Federal estate-tax planning
Preserving family wealth

Important Consideration

Transferring property into an irrevocable trust can affect ownership, control, taxes, benefits eligibility, financing, and creditor rights.

Created Through a Will

Testamentary Trust

Effective After Death

A testamentary trust is written into a will and generally comes into existence after the person creating the will dies.

It is often used when assets should be managed for a beneficiary instead of distributed outright.

Common Uses

Providing for minor children
Controlling inheritance distributions
Delaying distributions until a chosen age
Appointing a trustee to manage inherited assets

Important Distinction

Because the trust is created through a will, the estate may still pass through probate before the trust is funded.

Benefit Preservation

Special Needs Trust

Specialized Planning

A properly structured special needs trust may provide financial support for a person with disabilities while helping preserve eligibility for certain means-tested public benefits.

The drafting, funding source, distribution standards, and government-benefit rules require careful legal coordination.

May Support

Medical and therapeutic needs
Education and personal support
Transportation
Quality-of-life expenses

Benefits Review

Eligibility rules for Medicaid, Supplemental Security Income, and other programs can be highly specific.

Beneficiary Protection

Spendthrift Trust

Controlled Distributions

A spendthrift provision limits a beneficiary’s ability to transfer or pledge a trust interest before a distribution is made.

The trustee controls distributions according to the trust terms rather than giving the beneficiary unrestricted access.

May Be Considered When a Beneficiary

Has difficulty managing money
Faces creditor concerns
May be financially exploited
Needs long-term distribution oversight

Protection Limits

Spendthrift protection is not absolute and may not protect every distribution, claim, beneficiary, or trust creator.

Legacy and Giving

Charitable Trust

Philanthropic Planning

Charitable trusts can combine philanthropic goals with income, transfer-tax, and capital-gains planning.

The tax treatment depends on the structure, assets contributed, beneficiaries, payout terms, and applicable federal law.

Common Structures

Charitable Remainder Trust
Charitable Lead Trust

Possible Planning Benefits

Charitable deductions
Capital-gains planning
Income planning
Support for charitable organizations

Insurance Planning

Irrevocable Life Insurance Trust

ILIT

An ILIT is generally designed to own and administer a life insurance policy outside the insured person’s direct ownership.

When properly structured and administered, the arrangement may support estate-tax and liquidity planning.

Possible Benefits

Provides liquidity for heirs
Controls how proceeds are distributed
May keep proceeds outside the taxable estate
Supports long-term family planning

Administration Matters

Ownership, premium payments, beneficiary notices, transfers, and policy administration must be handled carefully.

Marital Estate Planning

QTIP Trust

Qualified Terminable Interest Property

A QTIP trust can provide income for a surviving spouse while preserving control over who ultimately receives the remaining assets.

It is often considered in blended families or when the person creating the trust wants to balance support for a spouse with a later inheritance for children or other beneficiaries.

Common Objectives

Income for the surviving spouse
Preservation for later beneficiaries
Federal marital-deduction planning
Blended-family planning

Important Consideration

QTIP planning is highly technical and generally requires coordinated tax and estate-planning advice.

Multigenerational Planning

Generation-Skipping Trust

GST Planning

A generation-skipping trust is designed to preserve assets for grandchildren or later generations.

It may be used as part of a larger federal transfer-tax strategy for substantial estates.

Potential Objectives

Long-term family wealth planning
Protection across generations
Controlled beneficiary distributions
Federal generation-skipping tax planning

Tax Coordination

Federal exemption allocation, transfer-tax rules, trustee powers, and distribution standards require specialized advice.

Real Estate Ownership

Land Trust

Property-Focused

A land trust is used to hold an interest in real estate through a trustee under the governing trust agreement.

Its usefulness depends on the transaction, title structure, financing, tax treatment, privacy goals, and applicable Texas law.

Possible Benefits

Privacy in certain ownership arrangements
Centralized property administration
Estate-planning flexibility
Potentially simpler beneficial-interest transfers

Real Estate Review

A transfer may affect title insurance, existing loans, due-on-sale provisions, property taxes, homestead rights, insurance, and liability planning.

Trust Planning Guide

Start with the goal— not the trust name.

More than one trust may apply, and some goals require additional wills, powers of attorney, beneficiary designations, business entities, or tax planning.

Planning GoalTrust Commonly Considered

Avoid probate for properly funded assetsRevocable Living Trust

Protect or restrict access to assetsIrrevocable or Spendthrift Trust

Provide for minor childrenTestamentary Trust

Support a person with disabilitiesSpecial Needs Trust

Own or administer real estateLand Trust or Revocable Trust

Plan for federal estate or transfer taxesILIT, QTIP, GST or Bypass Trust

Support charitable givingCharitable Trust

Texas-Specific Considerations

State law can shape how the plan works.

Probate and Funding

A revocable trust generally avoids probate only for property that has been properly transferred into or made payable to the trust.

Community Property

Texas community-property rules may affect ownership, characterization, management rights, taxation, and trust funding for married couples.

Estate Taxes

Texas does not currently impose a separate state estate tax, though federal estate, gift, and generation-skipping transfer taxes may apply.

Texas Trust Code

Texas trusts are generally governed by applicable provisions of the Texas Trust Code, primarily contained in the Texas Property Code.

Homestead Rights

Transfers involving a Texas homestead should be reviewed for ownership, creditor protection, property-tax, occupancy, lending, and spousal-right considerations.

Real Estate Documents

Deeds, title insurance, mortgages, beneficiary designations, and insurance policies should be coordinated with the trust plan.

This information is provided for general educational purposes only and does not constitute legal, tax, estate-planning, Medicaid, creditor, title, lending, or financial advice. Trust terminology, treatment, and suitability depend on the governing documents, ownership structure, applicable law, and individual circumstances. Consult a qualified Texas estate-planning attorney and other appropriate professionals before creating, modifying, funding, or transferring property into a trust.

Texas Trust Planning Guide

Common Types of Trusts Used in Texas

Trusts may be used to manage property, plan an estate, protect beneficiaries, support charitable goals, and coordinate long-term wealth strategies.

Select a category below to explore common trust structures and the purposes they may serve.

Interactive Trust Directory

Explore by planning objective.

Revocability and tax treatment depend on the governing documents and the way each trust is structured.

01 Revocable

Estate Planning

Revocable Living Trust

Commonly used to help avoid probate for properly funded assets, manage property during life, and simplify estate administration.

View Details

Common purposes

Probate avoidance
Lifetime asset management
Incapacity planning
Privacy

02 Irrevocable

Protection & Tax Planning

Irrevocable Trust

Commonly used for asset-protection strategies, Medicaid planning, estate-tax planning, and long-term family wealth planning.

View Details

Key consideration

The creator generally gives up certain ownership rights or control, and later changes may be limited.

03 After Death

Estate Planning

Testamentary Trust

Created through a will and generally becomes effective after the person who created the will dies.

View Details

Common purposes

Providing for minor children
Managing inheritances
Delaying distributions

04 Usually Irrevocable

Beneficiary Protection

Special Needs Trust

Designed to provide support for a beneficiary with disabilities while helping preserve eligibility for certain public benefits.

View Details

Planning focus

Supplemental care
Benefit preservation
Trustee-managed distributions

05 Usually Irrevocable

Charitable Planning

Charitable Trust

Benefits one or more charitable organizations while potentially supporting income-tax, capital-gains, or estate-planning goals.

View Details

Common forms

Charitable Remainder Trust
Charitable Lead Trust

06 Either

Beneficiary Protection

Spendthrift Trust

Restricts a beneficiary’s ability to assign or pledge trust assets before distributions are made.

View Details

Common purposes

Creditor protection
Controlled distributions
Protection from financial exploitation

07 Usually Irrevocable

Estate Tax Planning

Bypass Trust

Also called a credit-shelter trust, it may be used by married couples to preserve federal estate-tax exemptions.

View Details

Planning objective

Preserve assets for later beneficiaries while providing defined benefits to a surviving spouse.

08 Irrevocable

Marital Planning

Marital Trust / QTIP Trust

Provides income for a surviving spouse while preserving remaining assets for children or other later beneficiaries.

View Details

Often considered for

Blended families
Marital-deduction planning
Preserving remainder beneficiaries

09 Irrevocable

Multigenerational Planning

Generation-Skipping Trust

Transfers or preserves wealth for grandchildren or later generations while coordinating federal transfer-tax planning.

View Details

Common focus

Long-term wealth preservation
Generation-skipping tax planning
Controlled distributions

10 Either

Real Estate Ownership

Land Trust

Holds title to real property for privacy, administration, or estate-planning purposes.

View Details

Potential benefits

Privacy
Centralized property management
Transfer flexibility

11 Irrevocable

Asset Protection

Asset Protection Trust

Structured to help protect assets from certain future creditor claims.

View Details

Texas consideration

Texas does not provide a domestic self-settled asset-protection trust statute comparable to certain other jurisdictions.

12 Irrevocable

Residence & Gift Planning

Qualified Personal Residence Trust

Transfers a personal residence to a trust while allowing the creator to continue using the property for a defined period.

View Details

Planning objective

Reduce the value of a taxable gift while transferring a residence to future beneficiaries.

13 Irrevocable

Insurance Planning

Irrevocable Life Insurance Trust

Owns and administers a life insurance policy outside the insured person’s direct ownership.

View Details

Potential uses

Estate liquidity
Controlled proceeds
Federal estate-tax planning

14 Either

Income-Tax Classification

Grantor Trust

A trust whose income is generally reported by the grantor for federal income-tax purposes.

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Important distinction

“Grantor trust” describes tax treatment and does not, by itself, determine whether a trust is revocable or irrevocable.

15 Usually Irrevocable

Income-Tax Classification

Non-Grantor Trust

A separate federal income-tax entity that generally reports and pays tax on retained trust income.

View Details

Tax consideration

Trust tax brackets, deductions, distributions, and state residency rules may affect the overall tax result.

16 Revocable

Bank Account Transfer

Totten Trust

A payable-on-death bank account arrangement naming a beneficiary to receive the funds when the account owner dies.

View Details

Important distinction

It is generally an account designation rather than a separately drafted estate-planning trust agreement.

At a Glance

Revocable, irrevocable, or dependent on structure?

Revocable

The creator generally retains the ability to amend or revoke the arrangement during life.

Irrevocable

Changes may be limited and can require beneficiary consent, legal procedures, or court approval.

Either or Structure-Dependent

Some trust labels describe a purpose, tax treatment, or protective provision rather than revocability.

This information is provided for general educational purposes only and does not constitute legal, tax, Medicaid, asset-protection, title, lending, estate-planning, or financial advice. Trust names and legal effects can vary by drafting, funding, administration, and applicable law. Consult a qualified Texas estate-planning attorney and other appropriate professionals before creating, modifying, funding, or transferring property into a trust.