A lot of people walk into an estate planning meeting already convinced they need a trust, because that is what they have heard for decades. But a trust drafted properly can run 70 pages of legalese, and for many Texas families it solves a problem they do not actually have. Meanwhile, a much simpler tool can keep the house out of probate for a fraction of the cost.
This comparison comes from a conversation between Jeremy Kritt and Texas attorney Teresa Shapiro, who has a refreshingly practical, even contrarian, view of when a trust is and is not worth it.
This article is for informational purposes only and is not legal, financial, or tax advice. Talk to a licensed Texas estate planning attorney about your specific situation.
What a Trust Actually Is, and What It Is Really For
In Teresa’s framing, a trust is a complicated estate plan that is essentially a contract with you and your heirs that they do not sign. You dictate it. Her trusts run about 70 pages, and that is roughly a minimum, all in legalese that people hate and do not understand on their own. They understand it when she is sitting there walking them through it, page by page.
So what is the real, true advantage of a trust? Multigenerational control. It is a way to control how your money is transferred and used for generations. That is why they are sometimes called dynasty trusts: “I want my kids to get it, but my kids have to give it to this, and they can only use it for this.” It is the iron-fist-from-the-grave function, controlling everything that happens to that money for as many generations as it takes.
You Can Avoid Probate Without a Trust
Here is the part that surprises people. You do not need a trust just to avoid probate in Texas. Teresa specifically points to a transfer-on-death deed or a Lady Bird deed as one of the mechanisms. It is a deed drafted to transfer ownership of your house on your death without probate. When you pass, someone takes a death certificate to the county and they retitle the house, because that is what the deed says to do.
For many families whose main asset is the house, that simple deed accomplishes the goal a trust is often sold for, without the 70 pages or the cost.
The Medicaid Rule Changed: A Caution
There used to be a strong reason to use trusts to avoid Medicaid estate recovery. Generally, the trust had to be set up well in advance to pass the look-back period, and it then exempted the asset. Medicaid estate-recovery rules are specific and change over time, so confirm the current rules with an elder law attorney before relying on this.
Teresa says Medicaid has changed the rules. Medicaid now counts a house that is in a trust as an asset, so the trust does not exempt you from that the way it used to. She notes there are simpler, low-cost ways to address Medicaid estate recovery that are not 70 pages of legalese. Because Medicaid rules shift, this is exactly the kind of point to confirm with an elder law or probate attorney about your current situation rather than relying on what worked years ago.
When a Trust Genuinely Makes Sense
Teresa is not anti-trust. She points to specific situations where a trust truly earns its cost:
- Multigenerational control. If you genuinely want to control distributions across generations, that is what a trust does.
- A very complicated estate. If your estate is complex, a trust may be the right tool.
- A blended family. Her example: you remarried, your spouse has kids and wealth and you have kids and wealth, and you want both spouses to have access to the wealth while living, but when the second spouse dies it divides back out by how it was contributed. If the wife put in $1 million and the husband put in $2 million, the husband’s kids get two-thirds and the wife’s kids get one-third of what remains. That kind of structure is a job for a trust.
The historical context she gives: the well-known financial figure Suze Orman promoted trusts decades ago as the be-all and end-all for avoiding probate. Teresa’s point is that the landscape has changed, and in Texas you have simpler options now.
Watch the full video on YouTube: Do You Actually Need a Trust in Texas, or Will a Lady Bird Deed Do?
Frequently Asked Questions
Do I need a trust to avoid probate in Texas?
Not necessarily. According to attorney Teresa Shapiro, a transfer-on-death deed or Lady Bird deed can transfer your house at death without probate, which is often the main goal a trust is sold for.
What is the real advantage of a trust?
Multigenerational control over how and when assets are distributed. It is also useful for very complicated estates and for blended families that want a specific division when the second spouse dies.
How does a Lady Bird or transfer-on-death deed work?
It is a deed drafted to transfer your house on death. After you pass, someone takes a death certificate to the county and the house is retitled per the deed, with no probate of the house required.
Does a trust still protect a house from Medicaid estate recovery?
Teresa says the rules changed and Medicaid now counts a house in a trust as an asset, so it no longer exempts it the way it once did. Confirm current Medicaid rules with an elder law attorney for your situation.
Why do trusts run so long and cost so much?
A properly drafted trust can be around 70 pages of legalese with significant individual drafting. That complexity is part of why a simpler deed can be a better fit when the house is the main asset.
Make Sure the House Is Set Up the Simple Way
I help families across Central Texas sell inherited and probate real estate, and I see which estate setups make the eventual sale easy and which make it painful. The right tool for the house, chosen with a good attorney, can save your family enormous time and money later.
If you are dealing with an inherited Texas house or trying to plan ahead so your family is not stuck in probate, reach out for a free, no-obligation call. For the legal setup itself, I will point you to a probate or estate planning attorney.
Call 512-686-3076 or visit texasprobaterealestate.com. No pressure, no obligation.