The estate planning process typically involves establishing instructions for the transfer of property upon an individual’s death. The process may include the preparation of a Will, trust agreement, or various other documents that provide instructions on how an individual’s assets should be handled at the time of that person’s death or incapacity. The Guerra | Days Law Group’s Houston probate attorneys can assist clients with estate planning including the preparation of Wills and other documents.
A Will is the document that is most commonly associated with the estate planning process. A Will is a written instrument that identifies the person or persons who are to inherit the testator’s, the person creating the Will’s, assets. It also identifies the person or persons responsible for administering the estate and distributing the assets to the beneficiaries.
Failure to by an individual to focus on estate planning can result in the individual dying intestate which means without a Will. In Texas when a person dies intestate the state’s laws control the determination of who has the right to inherit from the estate and what their percentage interest in the estate is. Estate planning including the drafting of a Will permits the testator to avoid the state’s laws of inheritance and allows the testator to control decisions about who he or she wishes to inherit their assets.
A Will can be as simple or as complex as necessary to accomplish the testator’s goals. The testator may choose to transfer all of his or her assets pursuant to the Will or to have assets transferred to a trust to be administered by a trustee for the benefit of beneficiaries of the trust. In addition a Will can assist in determining who will care for minor children, provide for distributions to family members and friends who otherwise would not have a right to inherit, and allow for the executor to serve without the need for court supervision.
A Houston probate attorney with knowledge of estate planning can assist in determining what type of Will is appropriate.
Assets Not Covered by Will
There are certain assets that can pass outside of the probate process, which means that statements in a Will regarding these assets are not controlling. These assets may include life insurance policies with a named beneficiary, retirement benefits with a named beneficiary or assets that have a right of survivorship. A Houston probate attorney with knowledge of estate planning can assist in identifying assets that are not part of the probate estate and help plan accordingly.
Life insurance policies give the purchaser the ability to direct where the proceeds will be paid upon their death. They may choose to name one or more persons (“beneficiaries”) who will receive the insurance proceeds directly from the policy carrier or the individual may choose to make the proceeds payable directly to the probate estate or a trust. If the proceeds are payable directly to an individual or to a trust, they may be protected from creditors’ claims.
Retirement benefits from an employer or funds on deposit with an Individual Retirement Account (“IRA”) may also provide for payment of benefits to a named beneficiary in the event of death.
Bank Accounts and Securities Accounts are often shared by spouses, or may include the name of an adult child who is trusted to assist in managing finances. These types of accounts are frequently created in a manner that creates a right of survivorship or payable on death benefit to the surviving account holder. This means that upon the death of one of the account holders the value of the account vests in the surviving account holder. Therefore, a testator who believes that he or she was leaving these funds to be distributed to heirs pursuant to a Will may not have their wishes achieve that goal.
A Houston probate attorney with knowledge of estate planning can assist in insuring that assets are transferred according to the wishes of the individual and provide advice as to how that can be accomplished.
Trusts are legal arrangements wherein the creator known as the grantor or settlor transfers assets to be held by a trustee to be held and managed for the benefit of one or more persons called beneficiaries. The terms of the trust are defined by the trust documents and direct the trustee on the disposition of the trust assets for the benefit of the beneficiaries. In a trust the trustee is the legal owner of the trust property, and the beneficiaries are the equitable owners of the trust property.
Trusts should not be considered an Estate Planning tool of the wealthy alone. They allow for individuals of varying financial status to provide for more detailed terms of distribution of assets. A parent may wish to insure that funds from the estate are to be used for purposes of education or that children reach a certain age before having access to assets that would have otherwise been distributed at their death.
A trust provides the settlor with the ability to have additional control of the distribution of his or her assets to help insure that the assets provide for long term benefits to the beneficiaries rather than a one time payment they may not be mature enough to manage on their own.
Estate planning is a complex process that requires careful thought and structuring to accomplish the desired results. Proper estate planning can provide peace of mind to the individual seeking to do so along with lasting benefits to their heirs. The Guerra | Days Law Group’s Houston probate attorneys can assist clients with estate planning that is tailored to each individual.