Estate planning documents are crucial for everyone in Texas. While it is not fun to think about, it is important to give careful consideration to your will and other aspects of estate planning. This is where an estate planning attorney can help. You probably understand the importance of a will, but many people do not give other estate planning questions too much thought. Consider these questions:
- When was the last time you updated your will?
- Have you considered who would make medical and financial decisions for you if you were suddenly incapacitated?
- What if your parents or grandparents could no longer care for themselves and need a guardian?
- What if they pass away? What do you need to do as the executor of their will?
Our Arlington estate planning attorneys at Jackson, Landrith & Kulesz, PC can help you address these questions and more. Our attorneys here have years of experience helping our clients protect their assets and avoid probate by putting in place all of the documents they need.
We are here to help you, whether you have learned you are the executor of a family member’s estate or you just want to plan for your own future. Contact us today to learn about how we can help secure your family’s peace of mind and protect your assets.
What is an Estate Plan?
No matter how modest, everything you own is considered an estate under the law including cash, real estate, financial accounts, business interests, retirement plans etc. An estate plan refers to certain legal documents a person creates during their lifetime to direct what happens to their assets after the person’s death.
An estate plan also includes documents that explain what you want to happen if you become incapacitated and cannot manage your finances or make decisions about your health care. An estate plan may also address who will care for any minor children you leave behind.
Essentially, a solid estate plan will address the following questions about what you want to happen after you die:
- Who do I want my assets to go to when I die, and how much do I want each person to receive?
- Who will handle my legal, financial, and medical affairs if I become incapacitated and can’t make decisions for myself?
- Who will become the legal guardian for my minor children if I die?
- Will I have to pay an inheritance tax if I die, and how much?
- Who do I want to be in charge of administering my estate after I die?
- What do I want to happen if I become incapacitated and can only survive by being hooked up to life support?
- If I die with minor children surviving me and they inherit my estate, who do I want to serve as a trustee to manage the assets for my minor children?
- Do I want to leave part of my estate to a charity?
Which Documents go into an Estate Plan?
The documents that typically go into an estate plan include:
A will (also known as a “last will and testament”). A last will and testament names the primary beneficiaries of your estate and contingent beneficiaries if your primary beneficiaries die before you die. It is essential to understand that some assets you own may not be inherited through your will. This is because certain assets already have named beneficiaries and therefore pass outside of the will. These could include life insurance policies, funds in certain retirement accounts, payable-on-death bank accounts, and the property you own as a joint tenant with someone.
A living will or advanced medical directive. This document states your intentions regarding medical care if you become incapacitated and can only survive with the aid of life support. In Texas, this is called a Directive to Physicians and Family or Surrogates.
A durable power of attorney. This document grants an individual the authority to make decisions on your behalf if you become incapacitated. The durable power of attorney essentially authorizes another person to manage your bank accounts and pay bills, among other things.
Life Insurance. Sometimes an estate plan will also include life insurance to ensure your loved ones have enough money to pay bills and funeral costs after you die. Life insurance can always be purchased outside of the estate plan. Many people purchase life insurance when they have children. If you do not already have life insurance, you may want to discuss buying life insurance with an estate planning attorney when creating your other estate planning documents.
Permissions to Social Media and Digital Access. Finally, in the age of social media and online accounts with passwords, your estate planning documents may include instructions about who may obtain access to your social media and other online accounts after your death.
When is it a Good Time to Have Estate Plan Documents in Place?
Generally, anyone who owns anything of value or has children should have an estate plan in place. Persons with high-value estates should have an estate plan in place, regardless of their age. Even if you are young with relatively few assets, an estate plan is valuable so that you can explicitly designate what you want to happen to your assets if you die.
It is especially important for married people and people with children to have an estate plan. Nowadays, many people are entering second marriages. Often, they have children from a prior marriage. It’s important to make sure you and your spouse agree and are clear about where you want your assets to go after a spouse dies. You want to make sure your estate plan protects your children from a previous marriage. A good estate plan is essential to ensure your assets will go where you want them to go after your death, and it may prevent family strife and lawsuits over inheritances. It is also important to nominate a guardian for your children.
How Long Does it Take to Create an Estate Plan?
Creating an estate plan is a relatively simple and quick process. Most people can have an estate plan set up within a few weeks. If you’re working with an estate planning attorney, the first step is to have an initial meeting with the attorney. During this meeting, you’ll discuss the assets you own, your family situation (whether you’re married and have children), and where you want your assets to go upon your death.
You’ll also talk to the attorney about what you want to happen if you become incapacitated:
- Do you want someone appointed as power of attorney to make decisions on your behalf?
- What happens if you suffer a catastrophic injury and you’re in the hospital?
- Do you want to remain on life sustaining treatment (life-support) if you suffer a terminal or irreversible condition?
- If you die with minor children, who do you want to serve as guardian for your children?
- Who do you want to administer your estate immediately after your death during the court probate process?
After your initial consultation, it may take only a couple of weeks for your attorney to draft your estate planning documents. You’ll then review them and meet with the attorney again to sign the documents. After that, the attorney will give you originals to keep.
If you are setting up a trust, the estate planning process will likely take longer. In that case, your attorney will make sure the required documents are in place and that your assets have been moved into the trust.
When Do I Need a Trust Versus When Do I Need a Will?
If you die with a will in place, your estate will go through the probate process in a local probate court. A will is a document that simply directs where you want your assets to go when you die. Executing a will doesn’t move your assets anywhere.
Trusts can serve many different purposes. For estate planning, a trust can be used to reduce estate tax liability, protect property in your estate, and avoid probate. Texas law recognizes various types of trusts related to estate planning, including:
- Revocable living trusts
- Crummey Trusts
- Spendthrift Trusts
- Qualified Income Trusts (QIT)
- Medicaid-Qualifying Trusts
- Irrevocable life insurance trusts
An experienced estate planning attorney will know whether one of these types of trusts is appropriate for your situation. For example, suppose you have a large estate. You want your children to inherit from your estate, but you do not want them to access the money all at once. You don’t want them to fritter away their money by going out and buying a Porsche. In this case, you may want to have a so-called spendthrift trust, which doles out portions of their inheritance over a span of years. This is just one example of how setting up a trust can further your intentions for what happens to your estate after you die.
Most people have straightforward finances and don’t need to put their assets into a trust. Individuals with high net worth or complex finances, such as having assets in a business structure, often benefit from putting their assets into a trust. An experienced estate planning attorney can advise you on whether having a will is sufficient to protect your assets or whether it may be beneficial to move all or part of your estate into a trust.
How Can an Estate Planning Attorney Help Me?
Even with a will, the probate process is often complicated. This process pays off a person’s debts using assets from the estate, then distributes any money or items left according to the will or state law. Unless there is a trust in place to ensure friends and family members receive access to the assets they inherit, probate court proceedings, which can take months, are necessary.
On the surface, this process seems simple, but there are a number of state laws directing how you must navigate these procedures. For this reason, you should consider discussing your situation with a probate attorney before beginning these proceedings. This is the best way to ensure the distribution of assets goes according to your loved one’s wishes.
How to Get Started
It is always a good idea to hire an attorney to help you with your estate plan.
Templates you can find online do not always address Texas-specific laws that may affect your estate plan. An experienced estate planning attorney in Texas will have professional knowledge and experience with estate planning specific to Texas.
The attorneys at Jackson, Landrith & Kulesz, PC have many years of estate planning in Texas. We guide our clients through every step of the process as we create an estate plan catered specifically to your needs.
Contact Our Estate Planning Attorneys Today
You can reach the estate planning attorneys at Jackson, Landrith & Kulesz, PC by calling our Arlington-area office today. Schedule a time to talk with us about your estate planning needs or questions about the probate process.