Revocable Living Trust
A revocable living trust is an instrument (i) created by a person, the Settlor or Trustor, (ii) managed by a trustee (iii) for the benefit of the beneficiaries. In Texas, the same person can hold multiple titles under the trust. Typically, revocable living trusts are revocable during the lifetime of the trustor(s).
Revocable living trusts are popular estate planning tools because (i) the trustor retains control over the trust property during his lifetime; and (ii) the beneficiaries avoid the cost of probate after the death of the trustor. Also, revocable living trusts may allow for more effective management of the trust property until the estate is distributed to the beneficiaries.
In Texas, trustors may place their primary residences in a revocable living trust and keep their homestead exemption and homestead protection. Additionally, transferring a person’s residence into a revocable living trust is allowed by banks as an exception to the due on sale clause. (It’s actually a federal law that banks cannot hold a homeowner in default for the trustor transferring the property into his revocable living trust.)