An estate includes everything a person owns, including assets and outstanding liabilities at the time of death. Once all debts are fulfilled, what is left is known as net assets. In Texas, most people put off talking about estate planning, but by not having a plan in place, it can lead to the decedent's estate going into probate. Probate can be time consuming and expensive, but it can be avoided by utilizing one of the many financial devices available.
Writing a will and making a list of assets to be passed along to heirs is the first step in preparing for the future. Procrastinating about estate planning is a common mistake. In Texas and all other states, not having the proper documents in place in the event of one's death means the state's intestacy laws will determine how a person's assets will be distributed.
Congress has released a tax reform plan to eliminate the federal estate tax, also known as the death tax. Many lawmakers have had this tax on their radars for years, and most consider it another form of double taxation. In Texas, estate planning may still be necessary even without the federal estate tax.
Estate planning is a shrewd and clever way to provide for a family's financial future. Trusts are an alternative to leaving a will (or may be used in conjunction with one), and offer a broad range of flexible solutions during estate planning. In Texas, revocable trusts, commonly known as living trusts can be made, and managed according to the terms set forth by the creator. Living trusts can also be changed once they are put in place.
A living trust, or revocable trust, typically names the person who established it as the trustee. Should one spouse pass away, the surviving spouse would then become the sole trustee, in most cases. Since living trusts are often a component of the estate planning process for many Texas residents, it would be worthwhile to identify a successor trustee for when the surviving spouse also passes away. Financial experts say that children, other family members, friends or financial institutions are commonly named as successor trustees.
Many Texas residents and others around the nation likely have a will that determines how their assets will be distributed after they pass away. While having a will is important, it is even more critical to have documents in place that specifies how one's needs will be met should he or she become incapacitated. Financial experts recommend several key documents to include as part of an individual's comprehensive estate planning process.
Many couples in Texas and throughout the country are now deciding to live together rather than tie the knot. While many cite financial reasons for cohabitation, others simply have been married before and don't want to do it again. Most couples who live together don't see the need for estate planning, particularly if they don't have children. Industry leaders believe there are benefits for developing estate plans, regardless of marital status.
It is unlikely that most Texas residents have given much thought to how family members and loved ones will be affected after their death. However, it is a subject that needs to be addressed to ensure that someone's assets and property are distributed exactly as desired. While many may believe that estate planning is only needed for the wealthy, it can be a valuable process to help avoid family conflicts. Financial experts hope to convey the need for comprehensive estate plans by shattering some commonly held misconceptions.
Many Texas residents have likely not given a lot of thought to planning for the time when they pass away. While many may believe that estate planning is reserved for the wealthy to avoid heavy inheritance taxes, financial advisers recommend that most families need a plan. When individuals have children, grandchildren, parents, bank accounts or other assets, an estate plan is important to provide protection to families.
Many Texas residents and others around the nation may think about the legacy they will leave behind one day. However, most avoid discussing it since it involves thinking about a time when one will no longer be around. While it may be a sensitive topic, estate planning is vital in ensuring that one's assets are handled as desired.