We understand that many questions come up when thinking or researching about estate planning. Let us answer a few common questions here!
What is probate?
Probate is the public legal process that the courts use to determine that a person has died and started the administration of one’s estate. Essentially probate is a process to recognize a will, appoint an executor or administrator and establish a need for an estate administration. Estate Administration is the process that is used to gather estate assets, pay estate debts, expenses, taxes and ultimately distribute and retitle estate assets. Texas has several different procedures for the administering of an estate, some involve wills and some do not. However, the most cost-effective and efficient administration involves simply proving the validity of a will in court. Generally, the probate of a Will must take place within four years of the date of death. You also generally cannot represent your self in a Texas probate and you must retain counsel. You should seek an attorney experienced in estate planning and probate law.
What is a will?
A will is a legal document that outlines an individual’s wishes for how their estate will be distributed and identifies who will be in charge of your estate. A will should be drafted with the assistance of an attorney. 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.
What if there is no will?
In Texas, according to the Estates Code, several scenarios for distributing an estate are outlined. 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. In fact, without a will, the disposition of your estate is established by statute, not your wishes. Further, without a will, probate can be a very expensive and time-consuming experience. In short, get a will!
What is a trust?
A trust is an agreement that allows a third party, known as a trustee, to hold or distribute assets for beneficiaries as set forth in the trust agreement. Trusts are typically created to allow more control over how and when assets are distributed, as well as save on taxes and processing time. 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 an attorney.
What is a living will?
A living will is not a will. A living will is also known as an Advance Directive to Physicians. A living will is a document that outlines someone’s wishes for medical treatment in case he or she becomes unable to communicate his or her wishes generally in two circumstances (1) due to terminal illness or (2) due to an irreversible condition (like a vegetative state). These documents can and often do reflect the individual’s unique wishes regarding life support, resuscitation and end of life care.
What is ‘power of attorney’?
The durable power of attorney is used to aid individuals during periods of incapacity. It ends upon the death of the principal and is not a will substitute. A ‘Power of attorney’ involves the legally designated right of a person to appoint another person to make legal, financial or health-related decisions on behalf of another person that cannot do so for themselves. The power of attorney should be refreshed periodically to keep it current. Note, some financial institutions may not accept an older power of attorney. In fact, even if properly drafted a financial institution may not accept the document. It is important to engage an attorney to assist with the drafting of a Texas power of attorney.
Why is it important to have an estate plan?
While estate planning can seem like a daunting task, not having one in place is a much worse fate for heirs and beneficiaries. When legal documents have not been set up prior to death, it leaves a family with a costly and lengthy process that can leave heirs waiting years to receive their inheritance. It also leaves decisions about how to distribute the estate solely in the hands of the courts. The team at Wright Firm L.L.P. have years of experience in Texas probate law and can make the process less intimidating through our experienced and organized approach. In fact, Partner Paul F Wright is a Texas Board Certified Probate and Estate Planning Attorney as well as CPA. Texas Board Certified Attorney’s are the only attorneys who can say they are specialized and of over 100,000 licensed attorney’s in Texas only 7,300 are Board Certified.
Can estate plans be revised or updated?
Yes, and they should be revisited as life-changing events occur, such as the birth of a child, grandchildren, marriage/divorce, or significant financial or tax changes. We generally advise against using Codicils to update an estate plan.
Contact the experienced and knowledgeable team at the Wright Firm L.L.P. today – mention this article and receive a free consultation on your estate planning needs.