Estate Planning Basics
Why do I need estate planning?
Estate planning is not only for rich people – everyone has an estate, no matter how much money they have. Likewise, estate planning is not just for retired or older people, because unfortunately, bad things can happen to us at any time during our lives. And although estate planning definitely helps protect your loved ones when you die, proper estate planning also greatly helps you and your loved ones if you become temporarily or permanently incapacitated before you die.
Basically, if you do not have the proper legal documents in place for when you die or if you become incapacitated, then the state has strict laws that determine how your affairs must be handled. Oftentimes things end up getting administered very differently than how you would have wanted them too. Likewise, these legally mandated actions by the state often end up causing your loved ones tremendous emotional stress and anguish, and these actions usually waste precious financial resources that could have been much better used by the people you care about the most.
What estate planning documents do I need?
There are five basic estate planning documents that every adult in Texas should have. This is because proper estate planning covers not only what should happen to your estate when you die, but also what happens to you and your estate if you become disabled or incapacitated before you die. Having a will is certainly important, but it is not the only document that you should have in place in order to make sure your affairs are handled as you would want them to be during difficult times.
- Will – A will is a legal document that explains who will inherit your property when you die. It likewise can appoint a guardian for any minor children you may have. It also can give instructions to the court system that will save your loved ones precious time and money when they may need it the most. See the Wills page for more details.
- Power of Attorney – A power of attorney allows someone you trust to make financial decisions for you when you are not able to do so yourself. See the Power of Attorney page for more details.
- Medical Power of Attorney – A medical power of attorney authorizes someone you trust to make medical decisions for you if you were to ever become ill and unable to communicate with your doctor. See the Medical Power of Attorney page for more details.
- Living Will – A living will instructs your doctor as to whether or not you would want to receive life-sustaining treatments if you were to become extremely ill and unable to communicate. See the Living Wills page for more details.
- HIPAA Authorization – A HIPAA Authorization allows doctors’ offices and insurance companies to share your personal health care information with someone you trust, including family members. See the HIPAA Authorization page for more details.
What is considered part of my estate?
Per the IRS, your estate consists of the fair market value of everything you own at the time of your death minus your debts. These items include such things as bank accounts, stocks and bonds, real estate, life insurance policies, business interests and personal property like cars, jewelry, coin collections and artwork.
Do I have to worry about an estate tax?
New tax legislation in late 2017 doubled the already large exemption amount for estate taxes. The $5 million ($10 million for a couple) base exemption set in 2011 was set to $10 million ($20 million for a couple). This exemption is indexed to inflation, so the tax exemption amounts for 2024 will increase to $13.61 million for individuals and $27.22 million for married couples. Because of this estate tax exclusion, only a small fraction of the top 1% of the richest people in the country will pay an estate tax.
Does Texas have an inheritance tax?
No, the State of Texas does not have an inheritance tax.
Why should I use you for drafting my estate planning documents?
How do I work with you? How can your law firm create a will and other estate planning documents for me?
ESTATE PLANNING ARTICLES
Is There An Estate Tax In Texas?
At the state level, there is not an estate tax in Texas to be concerned about by anyone, but at the federal level there is. However, less than 1% of the population in Texas or even in the United States needs to worry about this. This is because even though an estate...
Discussing Life Insurance With Your Estate Planning Attorney
If you have life insurance or plan to buy some, then you should definitely discuss it with your estate planning attorney. Whether you have the payout on the policy go directly to an individual beneficiary, to your estate, or to a trust, life insurance plays a...
What’s The Difference Between An Executor And A Trustee?
An executor and a trustee play very large and important roles in your estate plan. But what’s the difference between an executor and a trustee? Knowing what their roles are can help you make better choices for these positions. An executor is the person you name in...
What Can An Estate Planning Attorney Do For You?
An estate planning attorney can do many things for you. He or she can of course create a will for you. A will is usually the most important part of someone’s estate plan. This document allows you to direct where all of your probate assets should go upon your passing....
Are Handwritten Wills Legal In Texas?
Are handwritten wills legal in Texas? Handwritten wills, also know as holographic wills, can be legal in Texas if written properly. It can be better than not having a will at all. But it’s certainly not the best way to have a will. For a handwritten will to be legally...
Do You Want To Be Buried Or Cremated Or….?
A few years ago I took a trip to Peru, and on that trip I took some of my father’s ashes with me. He had recently passed away, and he had made it very clear to us that he wanted to be cremated rather than buried. He likewise let it be known that he wanted his ashes...
A Medicaid Trust Helps People Qualify For Medicaid Benefits
A Medicaid Trust, also known as a “Miller Trust” or “QIT”, helps someone who wants access to Medicaid benefits when that person’s income exceeds the income cap. And the typical person looking to do this is an elderly or disabled adult trying to access affordable...
What Is A Homestead In Texas?
What is considered a homestead in Texas can have a very big effect on your estate planning needs as well as many other aspects of your life. The Texas Constitution lets a person establish a homestead which is basically a certain piece of real estate that is exempted...
A Lady Bird Deed Protects A Home From Medicaid Recovery
I have counseled several clients to use a what is called a Lady Bird Deed to protect a home from Medicaid recovery. [also see What Is A Transfer on Death Deed] The typical situation is that a parent or other loved one is elderly and has become so sick with an ailment...
Dying Without A Will Causes Unnecessary Stress And Wastes Family Money
I have written about dying without a will before, but I've had two particular clients contact me with difficult stories that I wanted to share on this subject. In both cases, a simple, inexpensive will created by an estate planning attorney could have saved the...
Testamentary Trusts Are Powerful Estate Planning Tools
Testamentary trusts are powerful estate planning tools that every estate planning attorney should discuss with their clients. When most people think of trusts, they think of something that is completely separate from a will. A testamentary trust is actually a trust...
Helping a Loved One Tackle Difficult Financial Decisions After the Death of a Spouse
The death of a spouse may leave an elderly individual feeling lost and wondering which way to turn for help. It’s an emotionally devastating experience, and an elderly person who’s spent a lifetime being responsible for others may feel as though everything has to be...
Getting A Will Should Be One Of Your Top New Year’s Resolutions
Getting a will these days is incredibly easy, yet it’s amazing to me how many people still don’t have one. And if they do have one it was created many years ago when their estate planning needs were very different than they are now. With attorneys now offering online...
The Major Differences Between A Power Of Attorney And A Will
The major differences between a power of attorney and a will are often not understood by my clients when they first contact me. Both are very important documents when it comes to estate planning. In many ways they are the most important documents of someone’s estate...
Tips On How to Prepare For Your Long-Term Care Needs
When considering the possibility of long-term care, many people prefer to tell themselves they won’t need it. However, the reality is that two-thirds of adults will require some form of long-term care. Meanwhile, others know they may need it but feel like they’ll be...
Making End-of-Life Discussions as Painless and Productive as Possible
End-of-life discussions with a loved one are never easy. However, those talks can provide comfort to you both when final days become reality. Here is important advice for opening those conversations about the inevitable. Start talking early Even if it’s...
Can I Create A Trust For Someone Else For Asset Protection?
Although you cannot create a trust for yourself with the goal of asset protection, you can create a trust for someone else with asset protection in mind. And these protections can come in two forms. The assets can be protected from potential poor money management...
Can I Probate A Copy Of A Lost Will?
I always tell clients to make sure their will is in a safe place that can be easily found by the right person or people when needed. For example, if someone thinks that there is a good chance that their will might get lost or destroyed, then they can file it for...
Do I Need To File My Will At The Courthouse?
Do I Need To File My Will At The Courthouse? Although you can file your will at the courthouse, it is not required. And most people don’t bother doing it. Whether you file it or not though, it is important to let the right person or people know where it can be found....
Who Gets My House If I Die Without A Will?
"Who gets my house if i die without a will?" If you own a house, die without a will, and don't have some sort of transfer on death deed for the property or have in a trust, then the courts must follow very strict rules in determining who gets the property. Oftentimes...
Who Will Inherit My IRA?
Who will inherit my IRA? - If you have an IRA, you most likely have filled out a beneficiary form that dictates where those assets will go upon your death. And if this is the case, then your IRA assets will get distributed outside of the probate process. Nothing in...
Can A Person Name Co-Executors For Their Will?
Clients often ask me if they can name co-executors for their will. The reason they usually ask is that they don’t want to hurt the feelings of one of their children who could have been chosen as an executor. Or perhaps they have children who don’t get along well, and...
How Do I Probate A Will In Texas With Independent Administration?
How do I probate a will in Texas with independent administration? Well, probating a will in Texas usually takes less time and money than probating a will in other states as long as the will is properly written and executed (signed and notarized). This is all the more...
Will Estate Taxes Need To Be Paid When I Die?
In Texas, whether or not estate taxes will need to be paid when you die greatly depends on the size of your estate. Luckily for the vast majority of us, there is no need to worry. First of all, there is not an estate tax, sometimes called a “death tax”, at the state...
Can A Living Trust Protect My Assets?
Many people wonder if they can create a living trust for themselves in order to protect their assets. In Texas you cannot do this as long as you have direct control over the assets. If you created an irrevocable living trust, then you could have asset protection due...
What Happens To My Assets If I Die Without A Will?
If you die without a will in Texas, the Texas Estates Code has strict rules that dictate where your assets go. For many or perhaps people this strict assignment of their assets is not what they would have wanted. And for some people, due to their specific life...
What Is A Transfer on Death Deed?
In 2015 the Texas legislature created a new way for people to transfer ownership of real estate at the time of their death with what is called a Transfer on Death Deed (TOD). [also see A Lady Bird Deed Protects A Home Medicaid Recovery] The way it works is that the...
Usually Not All Of Your Assets Pass Through Your Will
It’s very important to keep in mind that usually not all of your assets pass through your will. This is something that many people don’t realize. And this can potentially cause BIG problems. Assets that don’t pass through your will are called non-probate assets. These...
Will My Bank Account Pass Through My Will?
Most people incorrectly believe that the money in their bank account will automatically pass through their will in whatever way the will dictates. However, it is very common for a bank account to be opened either as a JTWROS (“joint tenants with right of...
What Can I Do If I Think I Am Likely To Become Incapacitated?
If you think that you are likely to become incapacitated for whatever reason, you should strongly consider signing an estate planning document called a Declaration of Guardian. [You likewise might consider getting a Living Trust] And by incapacitated, I mean that due...
What A Special Needs Trust Can I Do For A Special Needs Child
Estate planning is important for everyone whether they have children or not, but having the right documents, like a special needs trust, in place is perhaps even more important for people who have a special needs child. If a parent of a special needs child does not...
Is Estate Planning Expensive And Time-Consuming?
Is Estate Planning Expensive And Time-Consuming?: Given that almost two-thirds of Americans do not have a will, I think that many people believe that estate planning is too expensive and time-consuming and therefore not worth it. If you have a very large and/or...
What Is A Common Law Marriage In Texas?
Because of the important community property and separate property issues that come up in estate planning and probate, I often get asked “What is considered a common law marriage in Texas?” It’s a good and important question, especially since more people than ever are...
Should I Get A Living Trust In Texas?
A living trust in Texas is advertised all the time as a "must have" estate planning tool, but unfortunately many of these trust products are simply scams. It’s gotten so bad that the Texas Bar put out a pamphlet titled LIVING TRUST SCAMS AND THE SENIOR CONSUMER....
What Is Estate Planning?
What is estate planning? First of all, almost everyone has an estate, because an estate is merely made up of everything a person owns – cars, real estate, checking accounts, investment accounts, furniture, clothes, etc. So, dear reader, you are pretty much guaranteed...
Use A Spendthrift Trust To Leave Assets To Someone Who Isn’t Good With Money
A spendthrift trust can be a very powerful estate planning tool if you want to leave assets to someone who isn't good with money. I have always said that everyone has their strengths, i.e. things that they are good at. Some of us are very artistic. Some of us are...
Why You Need To Name Guardians For Your Children
It's bad enough that 64% of Americans don't have a will, but most parents of minor children have not named guardians for their children either. And you really need to name guardians for your children, because in some ways this might be even more important than having...
Choosing A Guardian For Your Child
A legal guardian is someone who is designated to take care of your child in case both you and the other parent of your child were to die before your child reaches adulthood. Yes, that’s a terrible scenario to think about, but unfortunately it’s a genuine possibility....
High School Graduates Need Estate Planning Too
It’s that time of year again when literally millions of students will be graduating from high schools all across the country. And even though most of their parents perhaps will still think of these fresh graduates as ‘children’, in reality the vast majority of them...
Can You Avoid Probate By Having A Living Trust?
Can you avoid probate by having a living trust? (please also see Do I Need A Living Trust) Well yes and no. Yes, for all the assets that you actually place into the trust you can avoid probate for those particular assets. For example, you could deed your house to the...
Your Estate Planning Documents During A Crisis
Here are some things to think about in regards to your estate planning documents during a crisis. The most recent example of a crisis that affected all of us was in 2020 and 2021 when COVID was in the depths of causing physical harm and financial havoc around the...
What’s The Difference Between A Will And A Living Will?
What’s the difference between a Will and a Living Will is another question that I often get from people who contact me. Even though they may ‘sound’ very similar, they are actually very different documents that take care of very different issues. A Will is a document...
Can My Power Of Attorney Take Care Of My Assets When I Die?
“Can my Power of Attorney take care of my assets when I die?” I get this question fairly often. And even more often than that, as I am talking to people about their estate plans I learn that many of them incorrectly assume that their Power of Attorney will still work...
Don’t Wait Until It’s Too Late To Make Your Will
Don’t wait until it’s too late to make your will. And this also goes for updating your will. Sure, life can get really busy, making it easy to put things off. And I think it’s somewhat human to be in at least partial denial to the fact that one day every single one of...
How Long Does It Take To Create A Will?
“How long does it take to create a will?” is a question I get all the time. Perhaps they are really busy with work and family, and they just don’t have much time to deal with such things, even though they are of course really important. Or perhaps they’re about to go...
Do I Still Need A Will If I Get A Trust?
“Do I still need a will if I get a trust?” is a question that I get often when people approach me about getting a living trust created to help take care of their estate planning needs. Although living trusts aren’t necessary in Texas as much as in other states, there...
The Differences Between Probate And Non-Probate Assets
Whether you have a will or not, you are most likely to have both probate and non-probate assets. In fact, I like to tell clients there are basically two "buckets" of assets – one for probate assets and and one for non-probate assets. Probate assets pass through your...
Power Of Attorney Co-Agents – Are They A Good Idea?
Oftentimes people want to name two of their children as power of attorney co-agents solely due to the fact that they do not want to hurt one of their children’s feelings. They are afraid that if they name one of their kids as the sole first choice as their agent and...
Will My Life Insurance Proceeds Pass Through Probate?
Will my life insurance proceeds pass through probate is a great question. Whether or not that happens depends on who you name as the beneficiary. If you name an individual such as your spouse or child or possibly even an entity like a nonprofit organization as the...
What Is Community Property And Separate Property In Texas?
When you are married you have community property and separate property in Texas. Each spouse has full testamentary power (the ability to say who gets which of those assets in their will) over their own separate property, but they have testamentary power only over one...
Do I Need To File A Power Of Attorney In Texas?
Do I Need To File A Power Of Attorney? A power of attorney, also known as a durable power of attorney, gives someone you trust completely the authority to act as your agent in making financial decisions for you in the event you are not able to do so yourself. For...
When Do I Need To Update My Will?
"When Do I Need To Update My Will?" If you already have will in place, then kudos to you for taking the time to help protect your family and assets! However, life circumstances can easily change to the point that it really is important to update your will and other...
Non-Probate Assets Do NOT Pass Through Your Will
Having a will does not necessarily mean that all of your assets will get divided per the terms of your will. Assets that pass according to the terms of your will are called probate assets, and assets that do not pass through your will are called non-probate assets....
Do I Need A Living Trust?
Unlike a testamentary trust which is created through a will and doesn’t come into being until you die, a living trust, sometimes called an inter vivo trust, is created and funded while you are still alive. Unfortunately there are lots of advertisements out there that...
Who Will Be The Guardian Of My Children If I Die?
One of the most important questions for every parent is this: Who will be the guardian of my children if I die before they are adults? If you have minor children and you were to pass away, then, barring some very extreme circumstances, your children would be raised by...
Why Do I Need A HIPAA Authorization For My Estate Plan?
Many people ask "Do I need a HIPAA Authorization?" or they may never have even heard of one. But it is one of the five estate planning documents that everyone should have (the others are a will, power of attorney, medical power of attorney and living will). Along the...
Why Do I Need A Living Will?
A living will is another one of the five estate planning documents that everyone should have (the others are a will, power of attorney, medical power of attorney and HIPAA authorization). Heaven forbid, but if you ever became incapacitated and diagnosed with a...
Why Do I Need A Medical Power Of Attorney?
Do I need a medical power of attorney? A medical power of attorney is one of the five estate planning documents that everyone should have (the others being a will, power of attorney, living will and HIPAA authorization). Compared to a 'regular' power of attorney,...
Why Do I Need A Power Of Attorney For My Estate Plan?
Why do I need a power of attorney? A power of attorney, sometimes called a durable power of attorney, is a very important part of an estate plan. It's is a legal document that gives someone you fully trust the legal authority to act on your behalf in making financial...
Why Do I Really Need A Will?
Why do I really need a will? I imagine just about everyone has at least thought about getting a will at some point in time, but many studies show that over half of all adult Americans do not have even the most basic estate planning documents. I think a big reason that...
Getting Documents Notarized During The Coronavirus Pandemic
Getting documents notarized during the Coronavirus pandemic had been a problem for many of my clients. For several years my law firm has been offering remote, digital estate planning services similar to those recently discussed by the Wall Street Journal. But the...