It may come as a surprise but the majority of Americans, 55 percent, do not have wills. Often, people are either too busy to make an estate plan or believe the choices involved in the process are so complicated that decisions are never made. The creation of an estate plan is important, beneficial and does not have to be complicated. Without an estate plan, an estate in Texas is subject to the default distribution rules, which means your assets and heirlooms may not go to the folks you want to receive them.
If you have children, they are most likely your most important asset. It is extremely important to have a willbecause as a parent you want to ensure your children are taken care of if something were to happen to you. A will can name a guardian in the unlikely event you pass away and they still need care. One common problem many parents face is figuring out who to name as guardian. To make the choice, think of the person who first comes to mind. The selection of someone is better than never making the choice, and as time passes and relationships change you can update your will to reflect these changes.
If you own a home or other property, such as a vacation home or investment property, it is also beneficial to have an estate plan. In Texas a will is subject to probate, and if you prefer to avoid probate a trust may be the appropriate estate planning tool. A trust may provide better asset protection and tax benefits than a will, and because a trust can generate income it can provide support for your heirs after your death. The support that a trust creates can provide for a child with needs or a cause of interest.
The creation of a will can also require you to think about two other complimentary estate planning tools: a power of attorney and a healthcare directive. A power of attorney allows another person to manage your financial affairs without becoming an owner of the assets, and a healthcare directive, also referred to as a living will, provides direction on the type health care you would like to receive if you become incapacitated.
Finally, even if you do not own a home or have children, chances are that you have assets of some sort. Bank accounts, retirement accounts, mutual funds and life insurance policies allow you to name a beneficiary, and these assets are also not subject to probate. It is important to name at least one beneficiary, and beneficiaries should be updated as you progress through life. For instance, you may want to change the beneficiary of an account that names a parent to the name of a child as time passes.
Contact an experienced estate planning attorney to create the best plan for your specific circumstances.