Proper estate planning is one of those things in life that none of us like to think about. For one, thinking about estate planning and end-of-life matters necessarily causes us to consider the end of our life. This is unpleasant and not something that many of us would like to do well on. For that reason, we tend to set it aside in favor of thinking about things that are much more pleasurable.
The other side of the coin on this issue is that none of us know for certain when we will pass on from this world. Talking about it in terms like this can be quite jarring but it is the reality of our lives that each of us cannot guarantee that we will be live from one moment to the next. If anything, this should spur us into action as far as learning more about estate planning and how simple steps can impact our life now in the lives of our family members after we are gone.
Someone once said that nobility is planting a tree the shade of which you will never be able to enjoy. We can think about estate planning like that. Once you and I passed on from this world we will no longer be able to enjoy any of the material things that we possess. I am referencing things like money, your home, investments, and anything else physical that you enjoy here in the world. However, by taking these islands into account in planning for their future of them after you pass on you can perform a great service to your family. Even if you don't have grandchildren or even children you can begin to lay a foundation that will benefit them a great deal.
It is not only people of wealth or means that need to be able to have an estate plan in place. For anyone who happens to be reading this blog post today who is younger or is only starting on their wealth-building journey, no one advanced that the attorneys with the Law Office of Bryan Fagan understand that you may have the reluctance to engage in the process of estate planning. Not only may you be second-guessing whether it is a necessary step for you as a young person, but you may have concerns over the costs and immediate impact on your life. Why spend the money on something that will not make much of a difference anyway?
The reality of the situation is that by taking new account proper estate planning techniques you can save your family a lot of grief if you pass away unexpectedly. Very few of us expect to pass away in our 20s, 30s, or 40s. However, unforeseen events, accidents, and things of that nature happen every day and people in this age group pass away unexpectedly. Many of them do not have a will. What your family will be left with is not only the grief of your passing unexpectedly but an inability to proceed with many of the necessary steps that are a part of attending to the business of closing accounts in collecting assets after your death.
One other aspect of this discussion that I feel is important to mention is that even if you don't have a great deal of the property that would need to be distributed at the time of your passing you almost certainly have a pet to your name. I say almost certainly because most of us have credit cards that carry balances. In addition, you may have student loans, lines of credit for a business, or any number of different types of debt. While household debts in the United States decreased at the beginning of the pandemic we are starting to see household debt increase as we come out of the pandemic. As a result, your state would be liable for those debts after your passing. If you want to avoid a circumstance where these creditors are contacting family members regarding your debts, you can protect their well-being by executing a well-thought-out state plan before it is too late.
The estate planning and probate attorneys with the Law Office of Bryan Fagan want to be able to meet you where you are in terms of helping you learn about the process so that you feel more comfortable moving forward to creating a viable estate plan for yourself and your family. Everything that I'm talking about here may be completely new to you and as a result, you may be uncomfortable with making decisions at this moment. That is completely reasonable. In this blog, we are going to walk you through the basics of estate planning no matter where you are in your life or your wealth-building process. You can then use the material containing this blog post to decide for yourself about the possible next steps in the estate planning process for you as an individual.
If, after reading today's blog post, you have questions about how you would like to proceed or what is best for you in your circumstances I would recommend contacting the Law Office of Bryan Fagan. Our licensed estate planning and probate attorneys can walk you through the estate planning process and help you to answer questions about circumstances that may be relevant in your life. Make no mistake about it, the estate plan that is best for you would not work for me, your neighbor, or anyone else. Estate planning is an incredible person-specific period as a result, you are better off learning about the estate planning process and then being guided by an experienced attorney who can help you to make decisions for yourself.
The importance of having a will
What are the most important lessons that we can discuss in today's blog post is the importance of having a simple will. Even if you are a young person headed off to college or are the parent of a young person who is headed off to college or the workforce after high school you and your children need to have a will. Many times, we consider the drafting of a will to be something done at the end of a person's life. However, we just finished discussing how none of us know exactly when the end of our life will come. As a result, it is best to take these sorts of matters into our own hands and to strike while the iron is hot.
Your will is a legal document that expresses your desires as far as how your assets should be distributed after your death. Importantly, a will ensures that your wishes will be followed by an executor who will execute those wishes once you pass away. Additionally, having a will can put your family in a good position to avoid having to go through the probate process. For property that does not have to go through your will to be passed on to beneficiaries, such as retirement accounts in bank accounts, you will simply need to designate beneficiaries within those accounts.
In your will, you will need to name an executor. An executor is a person that you would like to handle the affairs of your estate after you pass away. Rather than simply picking a person and putting their name into your will you should speak beforehand to the person. You can make sure that the person is comfortable with this responsibility and is willing to take it on. Once you find out that he or she is willing to take on the responsibility you can add them as the executor within the will.
Additionally, if you have children under the age of 18 you may want to name a guardian for the children if you and your spouse pass away simultaneously. This is a good move in that it allows you to dictate who will raise your children rather than putting that responsibility on a judge. The same rule applies as we just talked about with the executive order estate. You should speak to the person or persons who you seek to name as guardians of your children and make sure that they can meet the responsibility of raising your children. The last thing you would want is to name persons as guardians of your children without telling them.
What next after a will?
Once you have your own will drafted and signed we witnessed the notarized the next step in the process should be the durable powers of an attorney regarding matters related to your medical and financial life. What a power of attorney document is about these subjects is a legal document that provides the person you choose to have power of attorney the authority to act in circumstances when you are incapable of doing so. The whole point of the durable aspect of these documents is that the document would stay in place if you became unable To make decisions for yourself.
When you find yourself in a life and death situation probably the two most important areas of your life from a non-spiritual perspective are finances and health care. By having durable powers of attorney for health care and financial decisions you will have taken care of these two areas and will not have to rely upon a court to make decisions on your behalf. It would likely be a good idea to have authorization on file to allow this person to view medical records and perform other tasks on your behalf while you are unable to do so.
What are some next levels of estate planning?
For those of you who have a moderate amount of wealth to your name then having a simple will may not be in your best interest. While having a simple will is better than having no will at all you may benefit from the additional control and tax savings of a trust. Having this control over how your assets are distributed upon your death means that you can direct who, when, and how the property is distributed. By creating a trust and replacing a trustee in control of the assets you can be able to have autonomy over these matters even though at that point they trust we technically own the property after you passed away.
Keep in mind that another advantage to having trust is that you can bypass the probate process. This is important because the probate process only takes time to administer your estate after your passing, but it also puts your family in a position where in a state tax would have to be paid. Having property contained in a trust eliminates the need for probate he worked bypassed the probate process. This can save your family a great deal of time and money.
What if you are wealthy? What kind of estate planning do you need to have in place?
If you have any net worth greater than $5 million and you are someone who qualifies as a person who has a high net worth. If this is the case, then you will want to focus your attention on becoming very intentional when it comes to your money. Again, it is not that money is the most important thing in the world or that you need to focus on finances more than anything else. However, the simple truth is that money allows you to have control over your life, make better decisions for yourself and ultimately be generous.
It always surprises me to see extremely successful, wealthy individuals who do not have a well-thought-out estate plan. Even if you have worked for the sheer thrill of a job or sense of accomplishment that doesn't mean that money is not important. Even if it is not important to you or if you choose not to utilize money in certain ways during your life that does not mean that the same would be said for family or other potential beneficiaries of yours. As a result, you should consider becoming more intentional with your money regarding these subjects.
An example of this is the creation of something called an irrevocable trust. Any revocable trust is an estate planning instrument that is utilized to gift particular assets and property during your lifetime, but this allows you to continue to have control over the property. There are also tax advantages 2 here are vocable trusts that you can discuss with experienced probate or estate planning lawyer. On the downside, certain steps are necessary when it comes to purchasing or selling property about items in your trust. These sorts of hurdles and headaches may be worth it for certain high-net-worth individuals but not worth it for others.
If you are married for a second or third time, then you may want to inquire about how additional marriages may change your ability to control the assets that you have to your name. While finding love later in life may make your heart feel good now there are certain issues that you should consider regarding getting married and the effect on your estate and estate planning period this does not mean that you shouldn't get married if you don't want to. However, it also means that it is important for you to realize the Community property laws in Texas may supersede certain plans that you had with your money unless you allocate those. This may mean updating your will or even creating a premarital or marital property agreement.
Closing thoughts on estate planning
At the end of the day, the decisions that you make regarding your estate plan have more to do with your values than with anything else. By having a will or trust to protect, grow and distribute your property you are making a wise decision for your legacy as well As for your family. It shows that you are the type of person who puts others first and who is concerned with the well-being of those around you.
On the other hand, proper estate planning also means that you will avoid putting yourself in a position where it is the government that makes decisions for you regarding several important matters after your passing. Not having a will, for instance, puts your family in a position where it becomes more likely that your estate will have to go through probate. At that point, there are risks as to how a probate court judge would divide your property and at the very least will be delays in terms of how the property is distributed before passing. Proper estate planning can bypass these concerns input your family in a much better position.
Questions about the material contained in today's blog post? Contact the Law Office of Bryan Fagan
If you have any questions about the material contained in today's blog post, please do not hesitate to contact the Law Office of Bryan Fagan. Our licensed estate planning and probate attorneys offer free of charge consultations six days a week in person, over the phone, and via video. These consultations are not only a great opportunity to learn more about the world of Texas estate planning and probate law but to learn more about how your family may be impacted by end-of-life scenarios and estate planning issues before the end of your life.
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