Planning for your passing includes much more than just preparing funeral arrangements. When you pass away, there’s the question of what happens to your assets, including real property, owned businesses, financial assets, investments, or anything else that has monetary or even sentimental value. More important than money is ensuring your loved ones are cared for. The goal of any well-crafted estate plan is to avoid ambiguity or conflict when it comes time for your family to handle your assets. This is why carefully creating a thoughtful estate plan is so important.
Creating an estate plan, whether a will or a trust, is best handled with the help of experienced estate planning attorneys. This will help ensure that your will or trust is not only legally valid in the state of Texas but also that your last wishes are carried out correctly. You also want to avoid the worst-case scenario: a contested will that leads to your family and loved ones being involved in long and costly court battles.
Led by board-certified estate planner Ryan Randall, the experienced Dallas estate planning attorneys, and legal team here at Staubus and Randall are here to help. We will work with you every step of the way to create an estate plan that best articulates your last wishes.
What Is Estate Planning?
Estate planning is the process of creating a plan that describes what happens to your assets after you die or become mentally incapacitated. An estate plan will determine how your assets are divided and distributed. This plan includes designating the specific individuals who will receive your assets – the beneficiaries. If you have children who are minors or other non-adult loved ones whom you have legal guardianship of, you can designate a new legal guardian to care for them after you die.
Estate plans may also contain instructions for resolving financial issues, such as paying off debts and taxes. Your estate plan documents might also designate an executor and dictate the executor’s fee. Also, remember that an estate plan can be used for more than death planning: estate plans may also provide instructions for what happens if you are mentally incapacitated or unable to give consent for medical decisions. Your estate plan should include powers of attorney to designate the persons you wish to make medical decisions for and handle your finances.
An experienced estate planning attorney can help you determine if it will be financially advantageous for you to create a will or trust, depending on the nature of your assets, the size of your estate, and the various tax implications involved.
How to Begin to Create an Estate Plan in Texas
The person who executes the will is called a testator. The name of the person who creates a living trust is called a grantor or settlor. The testator or grantor must be 18 years of age or older, with a sound mind (mentally capable of understanding and making decisions).
A good place to start when creating an estate plan is to take inventory of all your assets. Consider your property, financial holdings, and other valuables. Gather relevant legal documents, such as the deed to your house.
You must also decide on who will be the beneficiaries of your assets. If you choose, you can put conditions on certain assets. For example, you can name someone to whom a certain amount of money will be given for college expenses. Be aware that creating conditions can be complicated, and some conditions may not be legally valid, especially when creating a will, so it is recommended that you consult with an attorney on the specific details of your plan.
There are two types of wills recognized in Texas:
- Attested or formal will: This is a will that is typed, typically written on a computer. Texas law requires that you sign this type of will in the presence of at least two witnesses over the age of 14. This type of will is typically written and prepared with guidance from an attorney.
- A holographic will: This type of will is fully handwritten and signed by the testator. This does not require the presence of witnesses. The State Bar of Texas notes that this type of will leaves more opportunities for it to be contested when compared to a formal or attested will.
One of the most common types of trusts is a living trust. With a living trust, the assets you place in your trust will be distributed to your beneficiaries at the time of your death by the representative, or successor trustee, you chose. With a living trust, the grantor retains the power to change the trust while they’re living.
There are other trust options you may consider for specific circumstances. A skilled attorney will review your assets, your circumstances, and your wishes to help you determine the best options to meet your needs.
Frequently Asked Questions
Discussing your specific circumstances and wishes with an experienced estate planning attorney is always best. However, we’ve answered some of the questions we often receive about estate planning.
What is included in an estate?
Estate planning generally takes into account all of the assets owned by an individual. These may include:
- Real estate property and land
- Cash holdings
- Investment assets, such as stocks, bonds, and trusts
- Vehicles and equipment
- Family heirlooms
- Valuables such as art and collectibles
What happens if I don’t have an estate plan or a will?
If you die without having a will or a living trust, your estate is distributed in accordance with Texas Probate law. Your assets are divided among your children, spouse, or parents if you are unmarried and childless. This is a formulaic process that does not consider the specific needs of your loved ones; it intends to find an heir for your assets. If you want a say in what happens to your estate after you die, you must leave behind an estate plan.
What does it mean for an estate plan to be contested?
A will or a trust is contested when someone challenges the validity of the estate plan by filing a lawsuit. They may argue that the person who created the estate plan was not mentally capable of making informed decisions or that it did not accurately reflect the person’s true wishes. To avoid having your estate plan contested, ensure it fully complies with Texas estate law.
Also, make sure that the estate plan is written concisely, leaving little room for misinterpretation. This is why you should draft your plan with the help of an attorney. An attorney experienced in estate law will ensure that the will or trust is legally compliant and written in a manner that reduces the possibility of it being contested.
How is an estate plan carried out after death?
When you create a will, you will name someone to oversee the distribution of your assets. The person is known as the executor. After your death, the executor files a petition to the Texas Probate Court. This court oversees the execution of wills and handles estate-related issues. This court will conduct a hearing to approve the executor officially. Once approved, the executor is legally authorized to carry out the instructions laid out in the will.
However, before assets can be distributed, the court requires that the executor submit a record of all the assets named in the will. This includes a list of the property owned by the will testator. The court then appraises the assets to determine their value at the time of death. After these steps are complete, your will executor can begin distributing your assets to your beneficiaries.
When the grantor or settlor of a living trust dies, their assets become the trust’s property. A successor trustee will be responsible for gathering and distributing the grantor’s assets in accordance with the terms of the estate planning document.
What are common issues with estate plans?
To be valid, estate plans must be carefully prepared and comply with Texas law. Some potential issues with estate plans include:
- Duplicate documents: It’s not uncommon for people to create an estate plan and then, later on, create another one to update their last wishes or to include newly acquired assets. However, you need to be very careful because if you leave behind multiple versions of your will or trust, it can lead to court challenges and delays in distributing your assets. Maintaining only one document and destroying any older drafts is recommended.
- Choosing the wrong executor or successor trustee: Your executor or successor trustee will be very important in distributing your assets after your death. They are legally responsible for taking care of your financial obligations and distributing your assets to your beneficiaries. Make sure you choose someone you fully trust. Also, verify that they have no financial or legal troubles, as the courts may determine this person is unsuitable.
- Health and mental capacity: Don’t wait until it’s too late: you want to create your estate plan while you are still healthy and do not have mental impairments such as dementia. When you create a will, for example, you must have what is known as testamentary capacity. This means that you are mentally healthy enough to understand the general nature and extent of your property, who your family is, that you are creating a will and the consequences of the will. If the court determines that you lacked testamentary capacity, they can invalidate your will.
Get Started on Your Estate Plan Today
The knowledgeable and compassionate Dallas estate planning attorneys at Staubus and Randall will walk you through every step of creating an estate plan tailored to your specific needs, whether it’s a will, a trust, or even a combination of the two, depending on your circumstances.