Are There Any Disadvantages to Trusts?

Trusts are an alternative estate planning tool to the probate process. The latter involves recognizing a will and appointing someone (known as an executor) to administer the estate and distribute its assets. The assets are distributed to the beneficiaries of the will.

However, probate isn’t ideal for all families. Families with lots of assets or complex family dynamics will stray away from the inevitably cumbersome probate process. Trusts are the preferred alternative in these situations because they’re better arrangements for complex families. Still, they aren’t perfect, and people should know about their disadvantages before choosing an estate planning tool. Here are what trusts are and their disadvantages.

What Are Trusts?

A trust is an estate planning arrangement set up by someone with some assets that are managed by another person for someone else’s benefit. The person with the assets and who sets up the trust is known as the settlor. The entrusted assets are managed by a trustee. Lastly, the trustee manages the assets for the benefit of another party, known as the beneficiary.

What Are the Disadvantages of Trusts?

The probate process can be costly, involving appraisal, court, attorney, and other fees. Trusts circumvent these costs, but they still cost money. Most of the expenses concerning trusts are accrued during the planning and structuring stages. Besides that, there can still be costs after the trust is set up, such as fees for transferring titles and compensation for the trustee.

Managing trusts requires diligent record-keeping. All property and assets transferred out of and into the trust need to be recorded. Bookkeeping is generally a detail-oriented process, and some record-keeping is necessary for trusts. However, this becomes a greater disadvantage if the trust’s financial holdings are frequently traded, taking up significant time and requiring extreme focus.

Trusts don’t bar the decedent’s creditors from claiming their debts. Typically, estates settle a decedent’s debts before distributing assets to the beneficiaries. If this isn’t done, and the decedent’s creditors find the assets or beneficiaries, they can file a lawsuit to collect what’s owed to them. Creditors don’t have a stipulated time frame to file a lawsuit, unlike with probate, where they have a maximum of six months.

If you’re looking for a trust or probate attorney, get in touch with us at Mike Massey Law. We provide estate planning attorneys in Travis, Houston, and other places throughout Texas.

8 views0 comments

Mike Massey JD, MBA, MPA just might be the 195th most interesting person in Texas. He has 4 college degrees and he's working on a 5th:  BBS Accounting; MPA Master's in Professional Accounting; JD Law Degree; MBA Master's in Business Administration; BBS in Biblical Studies (in progress).

Read More


  • Yelp Social Icon
  • LinkedIn Social Icon
  • Facebook Social Icon


Austin Westlake: 418 Grace Ln, Austin, TX 78746

Houston: 10810 Katy Fwy, #102,  Houston, TX 77043

San Antonio: by appointment only

Austin Arboretum: In process of relocating

¡Se habla español!

Subscribe to our newsletter

© 2020 Mike Massey Law.  Managing Attorney Mike Massey, 8911 Capital of Texas Hwy, Ste 3210, Austin, TX, 78759.  Email:  Phone: 888-407-2407.  Mike Massey, Texas Bar # 24032584. The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult an attorney for advice regarding your individual situation. We invite you to contact us and welcome your calls, letters and electronic mail. Contacting us does not create an attorney-client relationship. Please do not send any confidential information to us until such time as an attorney-client relationship has been established. Privacy Statement.  Prices can vary based on your unique situation and potential add-on services.  Prices for in-office (in person) meetings typically cost more than virtual meetings that are done over the phone instead of in person.  Prices for virtual estate planning do not include an execution ceremony or notary, as those services are not available with our discounted virtual estate planning packages. If your a personal injury case client on a contingency fee, then if we do not win, you will not be responsible for attorney's fees, court costs, or litigation expenses, but if we do win money for you via a settlement or court verdict, then attorney's fees, court costs, litigation expenses and unpaid medical bills will be taken from your share of the recovery. Mike Massey Law is not responsible for your unpaid medical bills.

FAQ's, Q&A, Answers, Information on this site: The materials presented on this site are intended for informational purposes only. These materials should not be used as legal advice applicable to the reader's specific situation. In addition, our provision of this information to the reader in no way constitutes an attorney-client relationship. No action should be taken on information provided within this website without counsel from a professional attorney. The request or receipt of any information from this website or any of the attorneys in our employ does not signify our acceptance to represent the recipient of this information.  It is our intention that all materials posted on this site be up to date and correct. However this information is subject to change without notice and should not be relied upon for accuracy and pertinence to the reader's specific circumstances.

*Note on Contingency Fees: No attorney’s fees unless you recover. Court costs, litigation expenses, and medical bills are paid from your share of the recovery. If there is no recovery, you will not be responsible for any court costs or litigation expenses, except for unpaid medical bills.