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Management Trust

A management trust can provide an alternative to a court-ordered guardianship for managing the financial assets and affairs of an incapacitated adult or minor in Texas. Management trusts offer various benefits and flexibility compared to the more rigid structure of guardianships. Our attorneys can advise whether establishing a management trust is appropriate for your specific situation.

Overview of Management Trusts

A management trust is a legal arrangement that is specifically designed to assist and protect individuals who are current wards under a guardianship or have been deemed legally incapacitated. It does this by establishing a trust structure to more effectively and flexibly manage their financial resources for their ongoing care, support, and well-being.

Appointing an experienced trustee allows customized management of assets without needing a court-ordered guardianship.

Challenges and Burdens of Guardianships

While the rules governing guardianships exist to protect vulnerable individuals, they can also create logistical challenges and undue burdens in some circumstances. These include requirements like:

  • Posting substantial guardian bonds to cover potential misconduct
  • Making regular accountings and detailed filings of all transactions
  • Attending frequent in-person court hearings
  • Paying guardian fees set by the court
  • Covering legal costs for court proceedings and filings

Given these drawbacks, courts often favor management trusts as a more flexible alternative where appropriate.

Eligibility Factors for Establishing a Management Trust

The following individuals and entities may apply to establish a management trust in Texas:

  • The guardian of an existing adult or minor ward
  • Court-appointed ad litems representing a ward’s interests
  • Those interested in the welfare of an alleged incapacitated person without a guardian
  • The incapacitated person themselves if they have capacity to execute a trust
  • Persons with only physical disabilities, not mental

Required Trust Terms and Provisions

Management trusts typically must contain certain provisions to align with their purpose, such as:

  • Naming the incapacitated beneficiary as sole beneficiary
  • Granting the trustee authority to disburse funds for the beneficiary’s health, education, maintenance, and support
  • Requiring undistributed income to be added to the trust principal
  • Specifying a corporate fiduciary trustee that can serve without needing to post a bond
  • Allowing the trustee reasonable compensation without court approval
  • Establishing trust termination conditions based on the beneficiary’s status

Special Needs Trust Flexibility

Courts may authorize omitting or modifying standard trust terms as appropriate to qualify the beneficiary for needs-based government aid or as otherwise in the beneficiary’s best interests. These are known as special needs terms.

The Takeaway

Properly drafted management trusts can provide an alternative to guardianships for flexibly managing finances on behalf of incapacitated beneficiaries while avoiding some of the burdens of court-ordered guardianships. Our attorneys can guide you in determining if a management trust is appropriate for your specific situation.

Why Choose Us?

Local Expertise: With a focus on probate and assisting clients in Houston, we understand local peculiarities and leverage our established network to expedite the probate process.

Vast Experience: Our attorneys bring years of dedicated experience in navigating Harris County’s probate system.

Client-Centered Approach: We recognize the emotional stress often associated with probate administration. Our objective is to alleviate this stress by providing you with top-notch legal support.

Contact us today to arrange a FREE consultation and make the probate process simpler for you.

Our Houston Probate Attorneys provide a full range of probate services to our clients, including helping with management trusts. Affordable rates, fixed fees, and payment plans are available. We provide step-by-step instructions, guidance, checklists, and more for completing the probate process. We have years of combined experience we can use to support and guide you with probate and estate matters.


Disclaimer:  The content of this website is for informational purposes only and should not be construed as legal advice and should not be acted upon without consulting a qualified probate attorney.


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