A Will Is The Foundation Of A Good Estate Plan
No matter how much money you have it is important to have a basic estate plan to protect your family and your assets after your death. An estate plan can be as simple as a last will and testament to extremely detailed to contain a power of attorney, a living will and even a trust. We’ll cover each of these tools in order.
A will is the first place to start your estate plan. You need to create a list of all of your assets and determine who you would like to receive those assets after your death. Your will is the legal document that lists your assets and who is to receive them. When drafting your will pay special attention to the probate laws of Texas to ensure that your will can be validated in probate court. If your will is disallowed then your property will be distributed without your will and according to Texas probate law. This is not something you want to take the chance of messing up so enlisting the aid of an estate planning attorney is a smart move. They can usually assist you for a reasonable fee.
Your will establishes your wishes with respect to your property, but what if you become incapacitated and can’t direct others as to your wishes? This is where powers of attorney come in to play. A power of attorney authorizes someone else to act on your behalf in business and legal affairs. A durable power of attorney allows another party to act on your behalf if you become incapacitated and are not capable of making decisions on your own. A health care power of attorney is a durable power of attorney that is specific to health care situations.
A living will goes hand in hand with a medical power of attorney. A living will states your intentions regarding health care if you are not capable in do so for yourself due to a future incapacity. The living will states WHAT you want done in specific situations and the health care power of attorney authorizes somebody to follow through on your wishes. These two documents are complicated enough that most are crafted by professional estate attorneys.
Next we are going to cover Trusts. Trusts are another vehicle that allows you to direct certain types of property with the added benefit that you can place restrictions and requirements on the assets. One of the most significant advantages of trusts is that there is no court involved. This allows for immediate dispersal of assets by the trustee (the person administering the trust). Because there is no probate court involvement trusts can also bypass public record of the transactions.
There are also significant ways to manage taxes at your time of death. Some of the many tools available to do this include a wide array of trusts (life insurance, remainder, personal residence, etc) and life insurance policies that pay directly to the beneficiary upon death. These vehicles are at the more complicated end of the estate planning spectrum.
Your first step is to create a list of all of the property you own. Once you have this list make a determination about who you want to receive each item. At this point it is a good idea to talk to your immediate family regarding your wishes as this can avoid significant problem in the future.
There are also other instruments available for estate planning but the important thing is to work with professionals to craft a plan that meets your specific needs and desires.
