When is a 1301 Management Trust a Good Fit For Your Family?

March 25, 2025

*Non-Deposit Investment Products are: not insured by the FDIC; not a deposit or other obligation of, or guaranteed by, the bank; subject to investment risks, including possible loss of the principal amount invested.

For many Texas families, planning for the future involves both building wealth and safeguarding the future financial well-being of loved ones. Specifically, when a family member is a minor child or incapacitated, it may be a challenge to manage their individual assets or secure their financial position.

A 1301 Management Trust may be a beneficial option for families that want a streamlined way to manage the assets for the long-term future of a minor or incapacitated individual.

Also, learn how the Wealth Management team at Texas Gulf Bank can help provide the financial guidance, asset management, and trustee services you need for your loved ones and their assets.

What is a 1301 Management Trust?

In the past, a minor or incapacitated person had to rely on tedious, expensive court-appointed guardianships to manage their assets, requiring court supervision for how all money is distributed or invested.

Texas law provides a strategic alternative to guardianship plans called the 1301 Management Trust. This specialized trust, established under Section 1301 of the Texas Estates Code, allows you to transfer the responsibility of managing assets to a professional trustee or financial institution, such as a bank, instead of relying solely on a court-appointed guardianship.

Section 1301 trusts are established by the Texas Probate courts and designed to manage the financial affairs of a minor or incapacitated person in a cost-efficient and secure manner. This type of trust can hold any asset – marketable securities, real estate, closely held business and oil and gas interests including minerals and royalties, etc. – to help build income for the individual.

By allowing a qualified trustee to handle day-to-day financial matters, this type of trust minimizes court costs and administrative delays while providing a more flexible structure for asset management.

Texas Gulf Bank offers Wealth Management Services that help families make strategic plans for their long-term wealth needs and can act as a trustee to help manage assets.

Why Consider a 1301 Management Trust?

There are several significant advantages to choosing a 1301 Management Trust with Texas Gulf Bank over a standard legal guardianship. These benefits include the following.

Cost Savings and Efficiency

To eliminate the significant legal fees and the ongoing court supervision of a standard guardianship, a 1301 Management Trust instead gives a professional trustee the authority to make routine decisions without waiting for court approvals. This streamlined approach can reduce legal expenses and allow for faster responses to financial needs.

Because this type of trust is under the oversight of the courts and requires annual accountings and reports to the court, our team works closely with families and attorneys. We provide professional management of assets, tax reporting, and coordination of court oversight.

Professional Asset Management

Partnering with an experienced trustee like Texas Gulf Bank means that your loved one’s estate will be managed with a keen understanding of both investment strategies and the specific requirements set by Texas law.

Our Wealth Management team excels at protecting and growing assets, ensuring that the funds continue to serve the best interests of your loved one over the long term. We have significant experience working with this type of trust and you benefit from local relationship management without needing to deal with call centers.

Controlled Distributions

One of the biggest advantages of a 1301 Management Trust is its flexibility in distributing funds. Instead of handing over a large lump sum once the sole beneficiary reaches a certain age, the trust can be structured to make periodic distributions to help prepare the beneficiary for full financial independence.

Asset Protection

Whether funds come from an inheritance, life insurance payout, or legal settlement, keeping assets in a trust offers a layer of protection against mismanagement, fraud, creditor claims, or other financial risks.

Since assets are held by the trust instead of the beneficiary’s name, they’re better protected from situations that could jeopardize their value, such as legal issues or potential scammers.

Simplified Estate Transition

A 1301 Management Trust offers a clear and orderly process for transitioning control of assets, streamlining the process for everyone involved. This setup can reduce potential conflicts and ensure that the beneficiary’s financial future is managed in accordance with the family’s long-term goals.

Take the Next Step for Your Family’s Future with Texas Gulf Bank

For decades, Texas Gulf Bank has supported individuals in the Southeast Texas Gulf Coast region by offering extensive expertise in Wealth Management. Our relationship-based approach makes us stand out as an ideal choice for families seeking guidance and professional support.

When it comes to managing something as significant as a 1301 Management Trust, partnering with a trusted local institution is key. We have close working relationships with probate courts throughout the area, including Harris, Fort Bend, Montgomery, Brazoria, Matagorda, and other counties.

If you’re ready to explore how a 1301 Management Trust can benefit your family, reach out today to schedule a consultation with our Wealth Management Team. We are ready to work with you and your attorney to create a trust through the court system.