Death and money are two topics that most families would rather not talk about, but it is important for the long-term welfare and well-being of heirs to an estate that an estate plan is put into place.
Importance of an Estate Plan
Without an estate plan, one’s heirs will be left to wait for years for an inheritance, which will be solely decided by the State of Texas court system. We often hear cases such as these from celebrities such as John Steinbeck’s and Prince’s estate battles.
Putting Together an Estate Plan
What are the first steps to putting together an effective estate plan? Begin with gathering a knowledgable attorney and financial advisor that can tailor a plan that will fit you and your family’s specific needs. Most estate plans include a will or trust.
A will is a legal document that outlines an individual’s wishes for how their estate will be distributed among their designated beneficiaries. A will determines who will be named the executor (the person responsible for carrying out the will), beneficiaries (the heirs or inheritors of assets), guardianship for minors if necessary, and instructions for the executor on how and when heirs can receive their inheritance.
If there is no will at the time of death, several scenarios for distributing the estate are outlined in the State of Texas Estates Code. It is important to work closely with a probate attorney in the absence of a will, because Texas probate law is complicated and changes frequently. Failure to have a properly drafted Will can subject your family to unnecessary costs and delay in the probate process.
You may ask yourself, “Don’t I already have beneficiaries assigned to my life insurance, etc.?” While this may be true, there are certain assets that may not have beneficiary designations. Some of these assets include cash accounts, your residence, other real estate, business interests, personal valuables and property. People wrongly assume because Texas is a community property state that if you are married assets will automatically pass to your spouse. This is simply not true. Everyone above the age of eighteen needs a Will in Texas.
A trust is an agreement that allows a third party, known as a trustee, to hold or distribute assets to heirs of the estate. Trusts are typically created to provide more control on how and when assets are distributed, as well as save on taxes and processing time. Trusts can be used to minimize or eliminate probate, allow your assets and estate plan to remain private, and even hold special assets. There are many types of trusts based on specific scenarios such as martial trusts and charitable trusts. Texas has specific laws on setting up trusts and it is advisable to work with a skilled attorney and financial advisor to ensure they are set up correctly. A Trust is also not a will substitute.
Living Wills and End-of-Life Care
Oftentimes, additional legal documents can outline your wishes for end-of-life care. A living will is a document that outlines someone’s wishes for medical treatment in case he or she becomes unable to communicate these due to terminal illness or unconsciousness. A living will is also not a Will. These documents can include topics such as life support, organ donation or resuscitation.
Let Us Help You
Estate planning can be seen as a chore, but working with the right team of experts such as those at the Wright Firm L.L.P, with years of experience in Dallas and surrounding areas, can work closely with you on developing a well thought-out estate plan that will provide peace-of-mind knowing your heirs will not be burdened with the task and costs of dividing up an estate. Contact us today for a free consultation on your estate planning needs.