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What happens to Texas families without a will?

Believe it or not, over half of those who are between the ages of 55 and 64 do not have a will in place. A will is vital to include in an estate since it gives instructions on how to distribute assets. Without a will, the state of Texas may make the decision on distribution.

Approximately 64 percent of the overall population has not created a will. Grantors who die without leaving a will are called dying intestate. This means that the state has the right to regulate which family members will receive the assets. When going this route, there is no guarantee that assets will be distributed to intended individuals, including children and surviving spouses. With this in mind, why would people not want to have a will in place?

How Texas residents can avoid estate plan mistakes

Most Texas residents have heard that it's important to have an estate plan. For those who are not aware of what estate planning is, it's the act of coordinating how personal and financial matters are dealt with in case of death or incapacity. One of the most common estate planning documents is a will, but only having that document could prove to be a costly mistake for Texas families.

When someone creates a will, it's a set of instructions on how a grantor wishes for their assets to be distributed upon death. It's important to have a will among documents since the state may decide how to distribute those assets without one. Many people make the mistake of having this as the only document in their estate plan, while there are others to be included, such as a medical power of attorney and financial power of attorney. A medical power of attorney allows grantors to choose someone to act as their health care agent just in case they're unable to make their own health care decisions.

Reduce Texas estate tax through giving

Estate planning can ensure accurate distribution of assets among one's beneficiaries. It's vital for Texas residents to be aware of estate tax. Grantors may be able to avoid estate tax through giving.

A retired couple is considering giving a certain amount per year to their 25-year-old son. They would like to do this in order to reduce the amount of their estate, but they are unsure if the funds can go into a trust for their son or if they must give it directly to him. Reportedly, grantors can give their family up to $14,000 per year without the worry of incurring estate tax. Since this is a married couple, they are allowed to give up to $28,000 per year.

Why estate planning is important for Texas residents

A survey conducted revealed that only 35 percent of individuals have created a will. Proper estate planning may play a vital part in the distribution of assets. Estate planning can also make a difference in whether surviving Texas family members are involved in a bitter dispute upon death.

This case is an example of why estate planning is such a crucial function. A woman was in critical condition after being in a house fire. She was sent to the burn unit and is on a ventilator. The family was in the process of working with medical professionals, but there was a problem. The woman had previously refused to create a will due to being protective over her personal information.

Steps for well-thought-out estate planning for Texas residents

Estate planning is an important function for most families. Estate planning allows Texas residents to designate how their assets are to be distributed and to whom. There are certain recommended steps to be taken for an estate plan.

One step is to appoint a trusted person to act on their behalf in the event of death or incapacitation. These trusted individuals are generally trustees over the assets or executors of the will, and the individuals will need to know where the estate documents are located. Another step is to write down wishes to make sure intentions are carried out. This can be done through legal documents such as a living will or power of attorney for finances. In addition, assets such as retirement accounts and insurance policies will need to have listed beneficiaries.

Digital asset protection for Texas residents

Most people want to create an estate plan to protect assets such as property, insurance policies and retirement accounts. What about Texas residents who have digital assets? There are steps that can be taken for digital asset protection.

A vast amount of individuals perform tasks online and end up creating digital assets. Digital assets are media or text that includes rights to use it. Digital assets include email accounts, online blogs and online social media. Other digital assets are online bank accounts and online shopping accounts. Upon someone's death, family members tend to pursue accessing these assets.

Texas families benefit from estate planning instead of promises

Making verbal promises for asset transfers do not hold up once a person is deceased. Failure to do proper estate planning can result in the state of Texas stepping in to choose how assets will be distributed. Any person can create an estate plan regardless of how much or how little he or she has.

One of the most general and important documents to include in an estate plan is a will. A will is a set of instructions on how an individual wishes to have his or her affairs handled once he or she is deceased. Wills do not just address the matter of assets, they also address matters involving children. It is recommended that parents designate a guardian, just in case both parents become deceased.

Creative estate planning tips for Texas residents

There are a variety of ways individuals can leave behind assets to their family and loved ones. One of the most efficient ways for Texas residents to ensure that their wishes are carried out after death is through proper estate planning. There are different components and tips that can be included in estate plans.

One tip that can be used is opening a bank account in the estate's name. Individuals can establish benefits such as pension, employer benefits and Social Security. For families to have access to important documents, it is recommended that a well-written checklist is provided. Some of the most important documents loved ones will need to locate are life insurance polices and retirement accounts. Other important documents are powers of attorney, trusts and wills.

How non-citizen Texas spouses can avoid estate tax

Estate planning is common for most citizens in this country. However, uncommon situations that may come up in estate planning are issues involving non-citizen Texas spouses. Tax breaks that would normally apply to citizens may not apply to those who are not citizens.

One of the most standard federal estate taxes requires the IRS to take 40 percent of excess estate if it's over $5.34 million. To reduce or eliminate estate tax, it's generally recommended that grantors donate a portion of their assets to family members -- such as children or surviving spouses -- upon one's passing. Also, as long as spouses are United States citizens, grantors may donate or gift an unlimited amount of assets without incurring taxes. An example of this is if someone is married to a citizen who has assets worth over the non-taxable amount, the person can donate the non-taxable amount to their children and the rest to their spouses to avoid taxes.

Texas grantors may learn from actor's estate planning mistake

Paul Walker is known for starring in the popular "Fast and Furious" movies. He did the right thing when he created an estate plan at only 28 years old. Since his sudden death in a tragic car accident at only 40 years old, his will revealed that he included his teenage daughter. As proactive as he was with estate planning, it's argued that he may have needed to update his will and Texas residents may be able to learn from this.

According to reports, Paul Walker's initiative received credit since he was so young at that time, especially since he appointed his mother as a guardian over his teenager. In spite of this, professionals stated that he may have made a mistake by not updating his will. Changes usually happen throughout someone's life cycle and in Paul Walker's case, he had substantial changes over a 12-year time period. During this time, Walker's net worth grew in large amounts, leaving his assets more subject to overbearing tax implications.

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