Common Myths About Estate Planning
- Estate Planning is Only for the Wealthy: Estate planning is essential for everyone, regardless of wealth. It’s about ensuring your loved ones are cared for, and your wishes are carried out.
- You Don’t Need an Estate Plan if You’re Young: Life is unpredictable. Regardless of age, having a plan ensures your loved ones aren’t left with difficult decisions and unnecessary costs.
- A Will is Enough: While a Will is essential, other documents like powers of attorney and healthcare directives are also vital in a comprehensive estate plan.
Key Documents in Estate Planning
- Wills: A will is the cornerstone of any estate plan. It spells out how you want your assets to be distributed after death. With a will, the state of Texas will determine how your assets are distributed, which may align with your preferences. In your will, you can also name guardians for minor children, making this document crucial for parents..
- Trusts: Because probate laws vary from state to state, there are some states in which a living trust is strongly recommended and will save quite a bit of time and money. However, probate in Texas utilizes independent administration, and using a living trust to avoid probate is often not advisable.
We recommend including testamentary trusts in your Will. If a couple is married with children, and they both die before their child reaches a certain age (usually 25, but it can be older or younger, as long as it is above 18) a trust would be created. The trust would not be formed/established/funded until and unless both parents die before the child reaches the designated age.
A living trust is one that is established and funded during life, in other words, now. Living trusts are often considered unnecessary in Texas. The State Bar of Texas publishes some information regarding common misconceptions about living trusts. Before pursuing an estate plan with a living trust, we strongly recommend clients review the information.
- Power of Attorney: Assigning a power of attorney (POA) allows someone you trust to manage your financial and legal matters if you become incapacitated. There are two main types:
- Financial POA: Manages your financial affairs, such as paying bills or managing investments.
- Healthcare POA: Makes medical decisions on your behalf when you cannot do so.
- Having these documents in place ensures that your wishes are carried out, even if you are not able to make decisions for yourself.
- Healthcare Directives: Healthcare directives, including living wills, are critical to following your healthcare preferences. A Directive to Physicians (sometimes called a living will) outlines your wishes for medical care at the end of your life or when you are on life support, while a medical power of attorney designates someone to make medical decisions for you.
- Contact our office for more information on estate planning: 512-494-1481
