Trusts

Initial Consultation Required. Trusts are a complex area. There are many different kinds of trusts and many different purposes for which they are used. Certain legal services may be requested at our firm without the need for an initial consultation, but trusts are not one of them. A paid consultation is required so we can review your situation and determine the correct approach to your trust. Fees are $250 and are credited toward total fees is you choose to proceed.

Fees for Living Trusts (Non-Anonymity). Fee guidelines for (non-anonymity) living trust agreements are $1,500. Add $450 for the warranty deed into trust (excluding recording with the county clerk). Credit is given for $250 initial consult. After the consult and upon request, we will provide an itemized statement of fees and costs before proceeding. More trust-related legal fees are shown below.

DIY Trust Documents. At our discretion, and for professional liability reasons, we may decline to work with DIY trust documents. Even touching these can get us sued.

Types of Trusts: General Information

Living Trusts for the Homestead. These are probate-avoiding trusts usually categorized as “revocable inter vivos trusts,” although they can be made irrevocable as well. Living trusts are excellent probate-avoidance device for the homestead, and our firm is a big advocate of these. Note that this type of trust is usually set up as a conventional living trust that does not include anonymity techniques since the homestead is already fully protected in Texas. Living trusts are often prepared in conjunction with a pour-over will. Suggest reading our web article Living Trusts in Texas.

Living Trusts for Non-Homestead Investment Properties (Non-Anonymity). These trusts are also categorized as revocable inter vivos trusts. Living trusts can be used not only for the homestead but for investment properties as well, particularly in conjunction with assignments of beneficial interest.

Testamentary Trusts. Unlike living trusts, testamentary trusts take effect upon death of the trustor/settlor/grantor. The two types of trust are otherwise similar. Testamentary trusts can be prepared for both homestead and non-homestead properties. This is an area where real estate law overlaps with estate planning.

Trust-Related Deeds. Deeds in connection with an anonymity trust have to be prepared carefully. County clerks accept such deeds for filing, but one has to be prepared to cure objections from a future title company. So the process involves a trust agreement and preparation of two warranty deeds to go along with it. One deed is recorded (not showing the name of the trustee) and another deed, which does show the name of the trustee, is held in reserve (a “deed in the drawer” technique) in the event a future title company requires it, which is almost certain.

Trust Used in LLC Formation. It is possible to form a living trust that acts as sole member of a newly-formed LLC, usually as a means to achieve a relative degree of anonymity. This approach requires careful drafting as the trust must be integrated across all core LLC documentation.

Trusts with an LLC as Beneficiary. This is a specialized structure that has pros and cons and is highly dependent on context. Inquire.

Entry Trusts for Investors. This is a specific type if investor trust (not for the homestead) used as a means to convey property to a buyer/end user. The basic process involves three documents: an assignment of earnest money contract, a trust agreement, and a general warranty deed into the trust.

Exit Trusts for Investors. This is a less common type of investor trust, not for the homestead. Inquire.

Other Types of Trusts. There are many types of trusts, as well as variations on the trusts discussed above, and we deal with some but not all of these. Inquire during the initial consultation.

Anonymity Trusts

Limitations of State and Federal Law. Texas is not Switzerland or the Cayman Islands. There is nothing easy or automatic about achieving anonymity in Texas or any other U.S. state. One cannot simply check a box that says “I want my entity to be anonymous” or “I want to be anonymous in this transaction.” The established system of recording and disclosure in the U.S. pushes back against this.

Layering of Entities. Considerable effort and expense may be involved in achieving even a relative level of anonymity. Note also that anonymity, if desired, must be built into an asset protection structure from the beginning. Anonymity is not an add-on.

One-Step Anonymity Measures are Limited. Our reference to “anonymity” means single-entity, single-layer anonymity unless clearly specified otherwise. However, layering of persons or entities is often advantageous in maximizing anonymity; it is very difficult (if not impossible) to achieve full anonymity in just one step. The high-net-worth international players who use anonymity techniques in offshore jurisdictions work with multiple layers of entities, trust, and trustees. This involves considerable expense (tens of thousands in fees). Unless one is willing to incur this expense, the degree of anonymity achieved will be always be relative and NOT absolute.

Anonymity Trusts are an Advanced Technique with Two Deeds. Trusts utilizing anonymity techniques are most often revocable living trusts that are used in the case of non-homestead investment property in order to conceal the true party in interest behind record title. In the anonymity system our firm uses, an anonymity trust is established to hold title; however, the name of the trustee is not disclosed in the deed which is public record.

Anonymity Techniques in Real Estate Transactions. Many clients request a trust in the hope of achieving anonymity in titling real estate. However, even in the case of trusts, anonymity is not a natural or normal feature of the American legal system, which tends to be focused on disclosure.

Anonymity Trusts for the Homestead. Achieving anonymity with the homestead is always a challenge because, on the one hand, you’re asking the appraisal district to grant you reduced taxation (which they dislike doing and may oppose) and, at the same time, keep your personal name(s) anonymous. The appraisal district may contest this arrangement, arguing that the trust is not a “qualifying trust.” Considerable discussion with them may be required. There are over 240 appraisal districts in Texas and they all have separate policies and separate personnel evaluating documents. Results vary, although our results over time have been generally positive. The point is this: We do what we can with the legal trust tools available, but success in achieving anonymity is never guaranteed to a client. Also, our fees are solely for establishing the trust and conveying property into it. They do not include any subsequent discussions or negotiations with any appraisal district or their attorneys.

Fees for Anonymity Trusts. These are a special case. In the case of anonymity trusts, our package includes the trust agreement plus two warranty deeds (one which names the trustee to hold in reserve and one which does not to record). Fees for the living trust agreement and a single warranty deed into trust are as follows:

Anonymity Trust – Property Value up to $999,000 – $1,750
Anonymity Trust – Property Value of $1.5M to $2.9M – $1,050
Anonymity Trust – Property Value of to $3M and up – inquire
Anonymity Trust – Two Deeds Necessary for the Process – $650 excluding recording

Trust-Related Documents Available

Living Trusts for the Homestead
Trust Agreements for Investors
Trust as sole Member/Manager of LLC
Warranty Deeds into Trust
Amendments and Modifications to Trust
Certification of Trust
Terminations of Trust
Assignments of Trust Beneficial Interest
Testamentary Trusts
Pour-Over Last Will and Testament

Fees for Amendments to Trust: Fee guidelines are $550 (simpler) to $950 (more complex) depending on the case, at our discretion. Note that if the original trust agreement is defective, it may need to be entirely replaced rather than merely amended. Initial consultation required with credit given to total fees if the client proceeds.

Assignment of Trust Beneficial Interest: Fee guidelines are $550 (simpler) to $950 (more complex). An initial paid consultation may be required before we agree to begin work on any assignment of this type. Circumstances vary widely. Initial consultation required with credit given to total fees if the client proceeds.

Certification of Trust. Fee guidelines for Certification of Trust (sometimes called a “memorandum of trust”) are $350 (simpler) to $550 (more complex). Note that we cannot guarantee that trusts prepared by others will meet the requirements of the trust certification statute or be satisfactory to a title company. We see lots of trusts prepared by others that are full of flaws. Sometimes an existing trust agreement simply needs to be replaced entirely. We will advise accordingly.

Termination of Trust: Fee guidelines for Certification of Trust (sometimes called a “memorandum of trust”) are $350 (simpler) to $550 (more complex).

Add-on Costs. Deeds of additional properties into trust are at the posted rate. Recording of deeds with the county clerk is not included (Note: trust agreements are not publicly recorded). The client does his or her own recording of the original executed deed with the local county clerk. Recording fees can be expected to be around $30 for a warranty deed, depending on the county.

Trust Templates for Client Use. To the extent these are available, templates begin at $450.

Trust Fees are Guidelines. Our posted fees are guidelines only, subject to variation due to complexity, at our discretion.

Terms of Service. By proceeding you indicate your unconditional agreement with our posted Fees and Policies.

Next Steps

Please complete our Client Inquiry Form. Our initial response will be preliminary and general in nature and not a formal legal opinion. You will then have the option of proceeding with paid legal services if you wish.