Trusts for Asset Protection in Texas: Which Ones Actually Work for Boerne Business Owners

If you own a business in Boerne, you have probably seen advertising for trusts that promise to put your assets beyond the reach of creditors. Some of those structures do useful work. Others do far less than the marketing suggests.

The difference comes down to one question: who benefits from the trust? That single point separates trusts for asset protection that hold up in Texas from the ones that leave a business owner paying for a false sense of security.

The Trust That Does Not Protect You From Your Own Creditors

A revocable living trust offers no creditor protection during your lifetime. You can undo it at any moment and take the property back, so the law treats those assets as still yours. A revocable trust is a probate and incapacity tool.

The harder surprise involves irrevocable trusts you create for yourself. Texas law says that when the person who creates the trust is also a beneficiary, a spendthrift clause does not stop that person's creditors from reaching their interest in the trust. Lawyers call this a self-settled trust. The statute carves out narrow exceptions, including certain trusts created between spouses, but those are limited situations rather than a general path to protecting your own assets.

Some states, including Nevada and South Dakota, do allow these arrangements. Texas has not joined them. A bill that would have created a Texas version was filed in 2025 and did not make it out of committee, so the rule described above is still the law today.

What Texas Already Protects Without Any Trust

Before paying for a complex structure, it helps to see how much Texas law already covers.

• Your homestead is protected by acreage rather than dollar value, up to 10 acres in a city, or 100 rural acres for a single adult and 200 for a family. The value of the house itself is not capped.
• Retirement accounts such as 401(k)s and IRAs are generally exempt from creditors.
• Personal property within categories set by statute is exempt up to $100,000 for a family or $50,000 for a single adult.

Now notice what is missing. Rental property, raw land, taxable brokerage accounts, equipment, receivables, and the business itself. For most Boerne business owners, the exposure is not the house or the retirement account. It is everything connected to the company.

Trusts for Asset Protection That Do Work in Texas

Protection in Texas generally comes from trusts created for someone other than yourself, and from pairing a trust with the right entity.

A trust for your children or grandchildren. When you create an irrevocable trust with a spendthrift provision for someone else, Texas generally respects that protection. The inheritance you leave may be better insulated from a child's creditors than an outright gift would be. One limit matters: the protection applies to assets held in the trust, not to money after it has been distributed, which is why how and when distributions are made deserves real thought.

A trust paired with an LLC. When a judgment creditor pursues someone's LLC membership interest, Texas law directs them to a charging order, which the statute describes as the exclusive remedy and which does not allow foreclosure of the interest. In practice that often means a creditor waits on distributions rather than taking over the business, though courts apply these rules case by case. The LLC does the liability work, and a trust that owns the membership interest handles succession and keeps the business out of probate.

An irrevocable life insurance trust. Holding a policy in a trust rather than in your own name can keep the death benefit outside your taxable estate and deliver cash to your family without probate. Timing matters here as well, since transferring an existing policy generally requires surviving three years for the estate tax treatment to apply.

Timing Decides Whether Any of It Holds

Under Texas fraudulent transfer law, a transfer made to hinder, delay, or defraud a creditor can be unwound, and a creditor generally has four years to bring that claim.

Moving assets after a lawsuit is filed, after an accident, or once a claim is clearly coming does not protect them. It can make the situation worse by adding a separate claim against you. Planning done years before any trouble arises is what gives a structure a chance to hold.

Key Takeaways

• A revocable living trust provides no protection from your own creditors.
• Texas does not generally recognize self-settled asset protection trusts, and a 2025 bill to change that did not pass.
• Your homestead and retirement accounts are already protected by Texas law without a trust.
• Trusts created for children or grandchildren with spendthrift terms generally do receive protection while assets stay in the trust.
• An LLC paired with a trust addresses both liability and succession for a family business.
• Transfers made after a claim arises can be unwound for up to four years.

Finding Out Where Your Business Is Exposed

A useful review starts with a list rather than a document. What you own, how each item is titled, which entity holds the business, and what insurance is in place will show where the gaps are. In many cases the answer involves better entity structure and coverage rather than a more elaborate trust.

Attorney Shawn McCammon and the team at McCammon Law, P.C. work with families and business owners in Boerne, San Antonio, New Braunfels, and throughout Kendall and Bexar Counties on wills, trusts, asset protection, and business succession planning. To request a consultation, bring your entity documents and a list of what the business owns, and we can walk through what Texas law protects and where you may still be exposed. Get a free consultation to learn more.

References:
Texas Constitution and Statutes, "Property Code Chapter 112. Creation, Validity, Modification, and Termination of Trusts" and Texas Constitution and Statutes, "Property Code Chapter 42. Personal Property"