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gringo pistolero wrote:That's why I said ethically rather than legally.

True, but IMHO, it's not always ethical for a govt to evict and make homeless a female "life partner"/spouse and take the home her life partner/husband owned if they decided to not get "married" for some reason (children of each don't get along, reduced income if they marry) or whatever.

Perhaps a person who would qualify for financial aid for school but whose parent earned 75 cents too much so they can't afford school, might qualify for school by using a trust so they can actually be employable and repay student loans and pay much more in Taxes after graduation than if they continued in a minimum wage job or been unemployable at all. Thus, more money for financial aid for others was just generated than had he not qualified and not gone to school.. Or, perhaps it was because he couldn't afford a promise ring/engagement ring and that assured his prospective future mother-in-law would talk sense into her daughter to wait for him ... who knows (As I said, people set up trusts for many reasons; they may not tell you the exact "why")

Ethics is sometimes a tough call, as when a lady hides in a closet and asks you to lie for her and husband with a gun says "have you seen my wife, I'll kill her because the chili had to much pepper in it. ... Lying is wrong but ...
I don't make the rules, but I try to help people and do no harm as best as I can. I try to make that discernment and refuse that which is obviously unethical, sometimes it's a balancing test, sometimes you are just guessing the "why" a person wants to do something if they tell you one thing but you suspect another... but One better than I judges.

gringo pistolero wrote:

RPB wrote: People might want to divest their ownership in a property for many other reasons. One person might set up a SELF-TERMINATING REVOKABLE TRUST to transfer assets to a trust with girlfriend as trustee and her mom as beneficiary while he qualifies for financial aid for college and the trust self terminates at Graduation or after 6 years or whatever.

Ethically that sounds like fraud even if it's not legally. Like someone making $100,000 through a foreign company they set up and applying for food stamps because "they" have no income.

Like a Miller Trust, where if a person has too much monthly income to qualify for Medicaid,Medicaid REQUIRES them to set up a Miller trust and put the excess monthly earnings into it, but in some circumstances, they are allowed to spend that "excess" money as if it was their own anyway, and when they die, any left in the trust account gets sent to Medicaid .... if any is left ... may be ...a dollar sixty-two. Sometimes that same law enables disabled children/"common law" widow a place to live rather than become homeless having their home turned over to Medicaid under the Medicaid Estate Recovery Program.

The government made the rules. People follow them. Knowledgeable people following the government's rules ... keep more of their stuff. Fair paying one's fair share and right and wrong have little to do with the law, I recall one Prof saying "Truth, Justice and the American way is Superman, not Law" It is what it is, sometimes it isn't "right" often it isn't "fair"

Caltex wrote:Living Trusts hold assets "in trust" for estate planning purposes,.

True. There are many types of trusts, and many purposes for them.

Estate planning and (MERP/Medicaid Estate Recovery Program) is only one purpose one might want a trust (Medicaid might require a "Qualified" or "Miller" Trust for Income.)

People might want to divest their ownership in a property for many other reasons. One person might set up a SELF-TERMINATING REVOKABLE TRUST to transfer assets to a trust with girlfriend as trustee and her mom as beneficiary while he qualifies for financial aid for college and the trust self terminates at Graduation or after 6 years or whatever. Or for some other reason. Sometimes the person divesting themselves of the property may be the Trustee or the Beneficiary, however, the trust owns the corpus or body of the trust, being said property.

Texas has Homestead Exemptions which concern Tax exemptions, this is different than Property exempt from forced sale as Homestead property.

As of 9-09, title transfers (in Texas only), do not remove existing Homsteads.

Wait ... ? You lost me with that statement. I am not familiar with that '09 ... What went in effect in Sept 2009?
I don't think I, myself have drafted Trusts since the mid 1980s, nor had a lawyer draft one since '08 so I'm unfamiliar with what you mean and my GO-To- guy died in '08
(I understand concerning Probate/ESTATE planning that a surviving Spouse etc may continue residing on a property, even though it was "owned" by a deceased Spouse, if that's what you mean ... Estate purposes/Probate)
But, if there is no death, and not concerned with Probate/Estate planning but merely exemptions from forced sale if a Trust is sued (not sure why it would be, but ...no coffee yet today; just brain exercising)
Transferring title means you no longer "own" the *corpus/property*

How could one claim an exemption from forced sale over something he does not own in the first place?

If I sell/deed my house to you, (or to a Trust, or a corporation or someone as a new owner other than myself) how could anyone force me to sell a house I do not own any more?
One cannot force you to sell what is not yours, or rather you cannot sell what you do not own. (Except at some pawn shops)

HOWEVER, similar to piercing a corporate veil to reach assets a Corporation possesses when suing an individual who treats those assets as if he was a sole proprietor of a business which he Incorporated for "protection" Medicaid and others can possibly sue the Trust/have a trust set aside to get a judgement and get those assets. Since the Trust ostensibly "owns" the property, the "person setting up the Trust, even if he is Trustee or Beneficiary" does not hold it as homestead property exempt from forced sale.

I'm not saying Living Trusts, or any type of Trust is bad (or good) but be sure of what you are getting, I've used Trusts (a couple of types) in the past for certain reasons.

Specific types of trusts exist for specific reasons, some may not do what one thinks they'd do as far as protection of a property. That's why Lawyers who understand Trusts need to be involved and the person needs to explain exactly what they desire out of a trust to the lawyer.

For you "non-native" Texans who got here fast as you could: A bit more on Homestead Protection in Texas http://www.lonestarlandlaw.com/Texas-Homestead.html" onclick="window.open(this.href);return false; (Not an endorsement, it's the same place as the OP provided)

Disclaimer: I have not had coffee yet today.
That's my layman's opinion/understanding, nothing herein to be construed as legal advice.

Grrr Old age sucks, My 1970s/80s/90s GO-TO guy and former friend and former professor for 3 courses years ago was Judge Russ Austin, (Authored Real Estate /Law textbooks, and taught-Russ was an adjunct professor of law at the University of Houston and the South Texas College of Law.) I just saw he passed away in 2008. (I moved from there in 07, my dad was ill and passed in 08 too) http://www.chron.com/news/houston-death ... 754365.php" onclick="window.open(this.href);return false;
My "New" Go-to- guy I used in '08 near Austin, Tx has a _____Memorial street named after him now... so, What went in effect in Sept 09? ... I'm unaware, retired and out of touch on some stuff

Moby wrote:GREAT advice on the home stead thing.
I did not know I'd lose that in a trust.

Perhaps the trust idea is a bad move.

In fact, the very link you gave indicates to me that I'd want to keep the home in my name, not a trust
http://www.eblaw.net/texas-homestead-law-legal-aspects/" onclick="window.open(this.href);return false;

In the past, a homestead property was not exempt from a perfected lien, but it was exempt from forced sale so long as the property remained the homestead of the debtor. Exocet Inc. v. Cordes, 815 S.W.2d 350, 352 (Tex.App.-Austin 1991, no writ).

I'm not a lawyer nothing I say should be construed as legal advice. And I didn't sleep at a Holiday Inn last night, nor pretend to on TV

Sounds like putting home in a trust for that reason could hurt you

now no trust
1) + homestead protection + good shoot= case dismissed you are ok
2) get sued and lose (if not a good shoot) and homestead protection law might exempt your home from being lost

but

why risk the home by removing your homestead protections to put it in a trust?

A home in a trust might mean since you do not own the property you lose homestead status protection which you currently enjoy... could a trust reside in the home and get homestead protection.
http://library.findlaw.com/1999/Oct/1/126857.html" onclick="window.open(this.href);return false;

And, some people wipe out any debt/judgements against them with a bankruptcy ... and keep their homestead ...Now if sued there's certain property they can't take anyway, (Homestead protection) but if you remove that homestead protection and say set up a trust (possibly a revokable trust?) so that A) it's not your homestead protected property ...you need a lawyer & I ain't one.

Sounds like it could be a really really bad plan for a Texan to put a home in a trust for the purpose of "in case I get sued"
But, you'd need a lawyer who listens and understands your purpose for doing so and thinks.

Why give up this homestead protection? :
http://www.eblaw.net/texas-homestead-law-legal-aspects/" onclick="window.open(this.href);return false;

The Texas Homestead Law has historically been designed to protect the property owner with regard to the individual or family residence. There are three primary benefits from a Texas Homestead:

1.) Protection from a Forced Sale
If an individual should become liable to another person as a result of a judgment rendered in a lawsuit, the individual against whom the judgment has been taken may not be forced to sell his or her homestead to satisfy the judgment. ....

Can a "trust/trust document" have a "homestead" can the "corpus" of a trust still be a homestead ... ask a lawyer.

Bad shoot+get sued+bankruptcy=wipe out judgement
or
Bad shoot+get sued+house exempt from forced sale(homestead protection)

or

possibly
Set up trust
Bad shoot+get sued+house title in name of trust (not an individual nor family) which property may not be protected from forced sale under homestead law now/ trust revoked, no homestead protection, lose house


Just something to ask/consider when you consult a lawyer if you decide to try to put house in a trust and "give up ownership" of that property, and the protections/rights that go with it.