Estate planning involves putting your affairs in order so as to maximize the benefits that your assets can provide to you during your life and to those you desire to benefit from it after your death.

Estate planning is more than just creating documents. It also involves understanding the big picture and how the legal documents will work in concert with the assets at the time they are needed.  We have probated eight do it yourself wills in the last few years that caused the families major problems and costs dramatically more to probate because the language did not clearly express the person’s intent.

This is one of the worst ways to plan your estate. If the assets are held jointly and one of the owners dies, the assets go to the surviving owners. The assets do not go to the deceased owner’s children. Also, the asset may be exposed to estate and gift taxes; it does not avoid probate, just delays it until the last owner’s death; it may cause estate, gift and capital gains taxes; it is subject to the creditors of all owners; and it will result in the transfer of the property to the joint owner when one owner dies, even if that was not intended taxes.

We offer to meet with our clients every three years to make sure that their plan is up to date. Conditions, as well as your desires, may change. Estate plans should be reviewed at least every three years but, additionally, any important change in your life demands immediate review.

These changes might include:

• Birth, death, marriage, divorce or disability of you or a beneficiary
• Large increase or decrease in the net worth of you or a beneficiary
• Substantial change in the type of your assets
• Purchase or sale of a business
• Change of residence to another state
• Change in tax law

Many people also believe that if there is no Will, all the decedent’s assets will be distributed to the surviving spouse. If you do not create a valid Will, the state of Texas has a statute that will dictate where your assets go and who will administer your estate. State law may not distribute your assets to the people you want to have them. The court will determine who inherits your property and will look for unknown heirs.  This is dramatically more expensive and time-consuming than probating a will.

Wills do not cover assets held as joint tenants with right of survivorship, retirement plans, annuities, life insurance, financial accounts payable on death or transfer on death designations.

A Trust is similar to a will in that it specifies who gets your stuff when you die and who is in charge of distributing your assets.  A Trust  is an agreement between three people dealing with assets. The Trustor is the creator of the arrangement who appoints a Trustee to hold the legal title to the subject assets for the benefit of the Beneficiary. Although there are certain legal limitations, it is possible for the Trustor and Beneficiary to be the same person and is even possible for the Trustor to serve as his own Trustee. In some situations, Trustors may wish a bank or other entity to serve as the Trustee.

• Probate Avoidance
• Retention of privacy of family assets and finances
• Avoidance of guardianship
• Creditor protection for your beneficiaries
• Control of distribution and management of assets during life and after death

Under Texas law, inheritances are the separate property of your child and not community property. His spouse has no rights in or to the inheritance. Of course, what your child does after he receives the inheritance can change what was once his separate property into community property. The most typical example is where the child who receives the inheritance places the assets into a joint bank account. Once he does that, it may not be his separate property anymore. So the best approach is to make sure he does not combine these newly received assets with the joint assets of he and his spouse. Certain types of Living Trusts, like a Heritage Trust, can help greatly in preserving these inherited assets as separate property.

A will is an important document, but it must pass through probate court before your wishes can be carried out — a process that takes time, costs money, and becomes part of the public record. A revocable living trust allows your assets to transfer privately and efficiently without court involvement. For many families, a trust-based plan is the more practical and protective choice, though the right answer depends on your specific circumstances.

Texas law will determine how your assets are distributed — a process called intestate succession. The result may not match what you would have chosen. Your spouse, children, and other relatives may receive shares that create conflict or hardship, and assets may pass to people you would not have chosen. Your family will also be required to go through probate court, with no guidance from you on your wishes.

A good rule of thumb is to review your estate plan every three to five years, or whenever a significant life event occurs — marriage, divorce, the birth of a child, the death of a beneficiary, a major change in assets, or a move to a new state. Documents that were appropriate five or ten years ago may no longer reflect your current situation or intentions.

Online tools can produce documents that look official, but they are not tailored to your family’s situation, Texas law, or the nuances of your goals. A poorly drafted estate plan can be worse than no plan at all — creating ambiguity, triggering unintended tax consequences, or failing to hold up in court. Working with an attorney ensures your plan actually does what you intend.

There is no need to have everything organized before we speak. A general sense of your assets, your family structure, and your goals is a good starting point. We will have you fill out an online form before your meeting with the information that we will need. We will guide you through the rest.