Why Do I Need a Will?
If you do not have a will, you do not control how your property passes upon your death. If you die intestate (without a will), the laws of the State of Texas determine who receives your property and who is in control of your estate upon your death. Having a will allows you to pass your property as you desire and allows you to name the person of your choice to serve as the executor of your estate. A well written will can reduce the cost of the administration of your estate. For some people, a will can avoid significant tax liability.
Why Might I Need a Trust?
If you plan to leave part of your estate to minor children, you will need a trust as minors cannot inherit property outright. If you do not create a trust in your will or by another document while you are alive, a Court will likely create a trust for a minor beneficiary named in your will or in a beneficiary designation form. If you create a trust in your will or as a separate document, you can control (1) who is in charge of the trust assets (the trustee), (2) how much the trustee is allowed to distribute from the trust and for what purposes; and (3) when the trust terminates.
In certain instances, creating a trust can produce significant tax savings for the beneficiaries of your estate. If you want to leave money to someone, but are concerned about their ability to wisely manage and spend the funds, then a trust is beneficial. A special needs trust can ensure that your loved one will not be disqualified from receiving certain types of government assistance. Trusts can also be helpful for people wanting to avoid an additional probate in another state for real property located outside the state of Texas.
There are other circumstances in which a trust is appropriate, and we can help you determine if a trust is appropriate for your planning needs.
Do I Need Other Documents in Addition to a Will?
Having incapacity planning documents in place can help you avoid unnecessary costs and legal proceedings in the event of your incapacity. A statutory durable power of attorney allows you to have an agent who can handle your financial affairs if you become incapacitated. If you become incapacitated and do not have a statutory durable power of attorney, your loved ones may have to obtain a guardianship or go through other legal proceedings to handle your financial affairs. Similarly, if you name an agent in a medical power of attorney, your named agent can make medical decisions for you if you become incapacitated. Other recommended documents include: (1) a HIPAA authorization which informs your medical providers with whom they can share your information, (2) a declaration of guardian which tells the Court who you prefer for your guardian in the event a guardianship is ever required, (3) a directive to physicians which allows you to tell your doctor and family when you wish to be taken off life support, and (4) a funeral power of attorney which allows you to appoint someone to make your funeral and burial arrangements after you are gone.
When is a Guardianship Appropriate?
A Court ordered guardianship is sometimes appropriate when (1) a person is incapacitated, (2) cannot take care of their daily needs, and (3) no less restrictive alternative is available. Determining when a guardianship is appropriate is fact specific, and we can assist you in determining when it is appropriate to request a guardianship in Court. Unfortunately, there are some cases in which a guardianship is the only appropriate alternative, particularly in cases involving financial abuse.
I am Married with Young Children. Do I Really Need a Will?
Yes. Wills are the last thing most parents with young children want to think about. However, you owe it to your children to have your will prepared. Executing a will allows you to determine who will act as guardian of your children and who will manage your estate for the benefit of your children if both you and your spouse are gone. This allows you, rather than a Judge, to make these very important decisions.
What Does a Will Do?
A good will allows you to decide who is going to care for your children if both parents are gone. In Texas, you can appoint a “guardian of the person” in your will which tells a Court whom you want to appoint as the guardian of your children. Leaving money for your children in a trust is another important thing you can do to protect the future of your children. Establishing a trust in your will (a “testamentary trust”) that only becomes effective upon your death ensures that the money and property you leave for your kids will be safe and used for their benefit according to your instructions.
What is Probate?
Probate is the process of proving in Court that a last will and testament submitted for probate in genuine, and having an executor or administrator appointed by the Court to administer the estate.
Why is Probate Necessary?
Probate is frequently necessary to pass title to property to beneficiaries. A will that is not admitted to probate does not pass title to property to beneficiaries. You will need to visit with a probate attorney to determine if a will needs to be admitted to probate as this is a fact specific determination.
Can I Avoid Probate?
There are several tools available to eliminate the need for probate. However, in Texas we have a very streamlined probate process, and frequently probate is the most cost effective way to transfer assets upon your death.
What is a Trust?
A trust is a legal entity that is created when the trustor (the person creating the trust), signs the trust document, funds the trust, and obtains the acceptance of the trustee (the person who will manage the trust). One benefit of a trust is that assets placed into a trust are not required to pass through the probate process. If a trustor is serving as trustee, upon his death the trust does not go through probate process, but instead a successor trustee named in the trust takes over the administration of the trust, and carries out the instructions of the trustor as set forth in the trust. A trust created and funded during a trustor’s lifetime can be revocable or irrevocable.
A testamentary trust is a trust created in a will. Testamentary trusts are not funded and do not come into play until the person creating the trust in their will has died. In order for a testamentary trust to take effect, the trustor’s will must be admitted to probate, and the executor of the estate must transfer title to assets to the trust.