At various points in our lives, the thought of planning for the future comes to the forefront of every person’s mind. Marriage, having children, and retirement are some of the events which trigger this thinking.
Wills and Trusts are legal instruments which are commonly thought of when it comes to planning for the future regarding guardianship of minor children and title transfer to property at the appropriate time. There are other, so called “Will Bypass” instruments and methods that should also be considered to minimize effort and cost to transfer title to real and personal property. Among others, there can be beneficiary designations on financial accounts, titling accounts as “Payable on Death”, and Revocable Transfer on Death Deeds to name a few.
The most expensive and time consuming scenario is when no planning is done. If a person dies without a Will, Will Bypass instruments or a Trust, title to property is conveyed by “Intestate Succession”. Intestate Succession through a probate proceeding generally involves an Heirship Proceeding and an Administration of the Estate. With a minimum of estate planning, this time and expense (to those left behind) can be avoided.
A Will is a legal document. The Texas Estates Code sets out the statutory requirements for a valid Will that can be probated in a Texas probate court. A Will can be simple or complex. Among other things, a Will can address specific bequests (Grandma’s wedding ring), general bequests ($500) and residual (catch all). In addition, a Will can establish or fund one or more trusts, address inheritance tax minimization, and guardianship for minor children. Even if one has a Trust or maximizes the use of Will Bypass instruments, there should be a Will as a safety net for any property overlooked.
The Texas Trust Code sets out the provisions that can be addressed in a Trust. In Texas, a Trust can even be verbal (not ever recommended). Any provision in a written Trust not addressed in the writing defaults to the provisions in the Texas Trust Code. Property in a Trust does not go through the probate process in that the title to Trust property is conveyed to successor beneficiaries by the terms of the Trust. There are no fees for transfer and there is no required order from the probate court. As a result, the conveyance is not available to the public as is the case in any action that passes through a probate court. In some cases, a Special Needs Trust can be established to provide for a person with disabilities to avoid spend down requirements of Medicare.
Selecting the appropriate options in Estate Planning is best done with a professional who can discuss and understand the individual needs of the person wishing to plan for their future. In addition to Wills and Trusts, a person should also review their need for a Powers of Attorney for Financial Transactions, Power of Attorney for Health Care, Appointment of Guardian and Directive to Physicians.
If you need legal advice concerning wills & trusts, contact us online or phone (713) 533-8457 to speak with our Houston attorney today.