Texas Living Trust

Introduction

Key Things to Know

1. 1

   Texas flips the usual trustee-bond default. Prop. Code Section 113.058(b) requires any noncorporate, meaning individual, trustee to post bond conditioned on faithful performance unless the trust instrument expressly waives it. If you name a spouse, adult child, or friend as successor trustee and your trust form has no waiver clause, that person can be required to post a court-set bond before acting.

2. 2

   A Texas living trust avoids probate only for assets you actually transfer into the trustee's name. Anything still titled in your own name at death, such as an account or a car you never retitled, is not covered by the trust and goes through Texas probate regardless of what the trust document says.

3. 3

   Creating a Texas trust needs no notary, witnesses, or will formality; Prop. Code Section 112.004 asks only for written evidence of the trust's terms signed by the settlor, plus the settlor's intent (Section 112.002) and definite trust property (Section 112.005). The deed that funds real property into the trust is different: to be recordable, Section 12.001(b) requires it be signed and acknowledged before a notary or other authorized officer, or signed before two subscribing witnesses.

4. 4

   Texas answers the homestead question directly. Prop. Code Section 41.0021 keeps a residence classed as the constitutional homestead once it is funded into a qualifying revocable trust, and Section 41.0021(e) preserves the surviving spouse's and minor children's separate occupancy rights under Tex. Const. art. XVI, Section 52 even while the house sits in the trust. Texas also exempts homestead equity without a dollar cap, up to 200 acres for a rural family homestead or 10 acres for an urban one.

5. 5

   Texas bars a real estate transfer tax by constitutional amendment (Tex. Const. art. VIII, Section 29), and a newer amendment added November 4, 2025, Article VIII, Section 26, bars the legislature from ever taxing a transfer from a trust to a trust. Texas has no estate tax, inheritance tax, or gift tax at any level.

6. 6

   The Texas Trust Code has no provision addressing community property funded into a joint trust; Fam. Code Section 3.102 defaults to joint management once community assets are placed under both spouses' joint control, which is what happens when a couple funds a joint trust. Texas practice is to add an express recital that community property contributed to the trust keeps its community character, since the Trust Code will not do that automatically.

7. 7

   Texas has no spousal elective share reaching trust assets and no self-settled asset protection trust statute; a revocable trust gives its settlor zero creditor protection during the settlor's life under Prop. Code Section 112.035(d). A surviving spouse's core protection instead comes from automatically owning half of all community property under Fam. Code Section 3.002. For banks and title companies, the trustee can furnish a certification of trust under Section 114.086 instead of the full instrument.

Texas Requirements for Living Trust

• Texas Trustee Bond Default for Noncorporate Trustees

  Tex. Prop. Code Section 113.058(b) requires any noncorporate, meaning individual, trustee to post bond conditioned on faithful performance unless the trust instrument expressly waives the requirement. A corporate trustee is exempt under Section 113.058(a). Include a bond waiver clause for each individual successor trustee named in the trust.

• Texas Homestead in Qualifying Trust

  Tex. Prop. Code Section 41.0021 keeps a residence classed as the constitutional homestead once funded into a qualifying revocable trust, and Section 41.0021(e) preserves the surviving spouse's and minor children's occupancy rights under Tex. Const. art. XVI, Section 52 even while the house is held in the trust.

• Texas No Transfer Tax and No Estate or Inheritance Tax

  Tex. Const. art. VIII, Section 29 bars any tax on a conveyance of real property, and Section 26, added November 4, 2025, bars any state tax on a transfer from a trust to a trust. Texas imposes no estate, inheritance, or gift tax at any level.

• Texas Community Property Recital for Joint Trusts

  The Texas Trust Code has no provision addressing community property funded into a joint trust. Add an express recital that community property contributed to the trust keeps its community character, since Tex. Fam. Code Section 3.102 otherwise defaults to joint management once assets are placed under both spouses' joint control.

• Texas Certificate of Trust

  Tex. Prop. Code Section 114.086 lets the trustee furnish a certification of trust in place of the full instrument to a bank, title company, or other third party. A recipient who demands the full instrument in bad faith is liable for the trustee's resulting damages under Section 114.086(i).

• Texas Real Property Funding Deed Formalities

  Creating the trust itself needs no notary or witness (Tex. Prop. Code Section 112.004), but a deed funding Texas real property into the trust must be acknowledged before a notary or other authorized officer, or signed before two subscribing witnesses, to be recordable under Section 12.001(b).