“Should I have a trust?” is really two questions. A revocable trust and an irrevocable trust do very different jobs, and much of what people have heard about trusts is true of one but not the other.
The basics
A trust is an arrangement in which a trustee holds property for the benefit of beneficiaries, under instructions written by the person who creates it (the settlor or grantor). A trust only controls property that has actually been transferred into it.
Side by side
- Control
- Revocable: you can change or cancel it at any time, and usually serve as your own trustee. Irrevocable: generally cannot be changed by you once signed; someone else typically serves as trustee.
- Probate
- Both avoid probate for the assets they hold.
- Incapacity
- Revocable: a successor trustee can step in without a court. Irrevocable: the trustee is already managing.
- Creditors
- Revocable: no protection from your own creditors. Irrevocable: can protect assets, if properly structured and not set up to defraud creditors.
- Medicaid
- Revocable: assets are treated as yours. Irrevocable: can protect assets, subject to the five-year look-back.
- Taxes
- Revocable: no income or estate tax savings. Irrevocable: can remove assets from a taxable estate; may file its own tax return.
Revocable living trusts: what they are good for
- Avoiding probate, especially for property in more than one state.
- Managing assets if you become incapacitated, without a guardianship.
- Privacy, because the trust is not filed with a court.
- Controlling inheritances for young or vulnerable beneficiaries after your death.
What they are not: a tax shelter or an asset protection device. In Texas, a trust you create for your own benefit does not protect your assets from your own creditors.
Irrevocable trusts: when they earn their keep
- Medicaid planning, when set up more than five years before care is needed. See our Medicaid guide.
- Life insurance trusts, keeping policy proceeds out of a taxable estate and under a trustee's management.
- Large estates. The federal estate tax exemption is $15 million per person in 2026. Texas has no state estate or inheritance tax. For most families, estate tax is no longer the reason to use an irrevocable trust — but for some it still is.
Other trusts you may hear about
- Testamentary trust
- Created in a will; takes effect after death. See what a testamentary trust is.
- Special (supplemental) needs trust
- Holds an inheritance for a person with a disability without disqualifying them from SSI or Medicaid.
- Spendthrift provisions
- Prevent a beneficiary from assigning their interest and protect it from the beneficiary's creditors before distribution. Common in Texas trusts.
- Bypass or credit shelter trust
- Historically used by married couples to use both spouses' estate tax exemptions. Portability and higher exemptions have made them unnecessary for many families, though they still have non-tax uses.
- Blind trust
- Used mainly by public officials to avoid conflicts of interest; an independent trustee manages assets without the owner's knowledge.
And the “trust fund” stereotype aside, most trusts today are ordinary tools used by ordinary families — usually to protect a child's inheritance, not to fund an idle lifestyle.
Do you need one at all?
Many Texas families do not. A well-drafted will, a transfer-on-death deed, beneficiary designations and powers of attorney often accomplish the same goals at lower cost. A trust makes most sense for property in multiple states, beneficiaries who should not receive money outright, privacy concerns, blended families, or long-term care planning.
Common questions
If I have a trust, do I still need a will?
Yes, a short “pour-over” will that sends anything left outside the trust into it, and names guardians for minor children.
What is the most common trust mistake?
Not funding it. A trust that never received the house or the accounts does not avoid probate for them. See putting your house in a living trust.
This guide is general information about Texas law as of September 2026, not legal advice for your situation. Laws and dollar figures change, and small facts change outcomes. Reading it does not create an attorney-client relationship. Grover C. Peters III is responsible for this content.