When you have a will then you have power over your property even after you pass away. There are not many things that you can prepare for when it comes to your death. None of us know the exact time, location, or way we will pass away. With that said, what happens to our estates (the total of our property and debts) can be controlled by engaging in estate planning. Contrary to what many people think, having a will is not for rich people or older people or for anyone. Rather, having a will is for anyone who is over the age of 18. Rich or poor, old, or young- having a will is for you. Yes, I mean you reading this blog post right now.
Deciding to put a will into place for your estate is among the most responsible and noble decisions that you can make. They say that nobility is the act of planting a tree the shade of which you will not be able to enjoy. What you are doing at this moment by creating a will does not stand to benefit you. A will becomes effective only after a person passes away. Rather, when you create a will, it means that you can control how property and assets are distributed once you pass away. Without some kind of estate planning, this is not possible. A probate court judge would use the laws of the state of Texas to distribute property to your heirs. Whomever your heirs are, no matter if you love them or hate them, they will receive your property. That's some risk you are taking by not having a will.
When you have an estate plan in place, whether simple or complex, it allows your family to focus their energy on what matters most- each other and their memories of you. Think about things from their position. You have just passed away and waves of grief are washing over them. While experiencing all those emotions, your family may also have to handle complex financial matters related to your passing. Does anyone in your family want to start looking up the rules on filing a probate case while still trying to process your passing and what it means to your family? I don’t think so. You can do something to help them avoid that situation entirely.
Won’t somebody please think of the children?
Do you have minor children? If you do, then odds are you are not exactly in the age range to be thinking that your death may be something that is around the corner. You may be more focused on getting the kids ready for school than you are on getting your will ready for probate. However, considering how we just finished discussing how we cannot predict the time, place, or location of our passing, that should not cause you to feel all that secure about where you are as far as your estate planning is concerned. The lack of estate planning when you can do so should be something that concerns you. It doesn’t mean that you need to become upset and take off work for a week so that you can write your will. However, it does mean that you should do something sooner rather than later to prepare your estate.
When you have children at home that means you should have more on your mind when planning your estate than trying to decide who gets what item that you own. Rather, your primary focus first and foremost should be on your children. Specifically- who is going to take care of your children if you pass away while they are still minors? Have you given that any thought? When your spouse is still alive then she will be the one to care for your children. In a situation like that then there are other estate planning measures to think about which can help your spouse. What if you and your spouse both passed away in an accident? Do you have anyone in mind who would take good care of your children and be able to take on that responsibility?
These are the questions that you should be asking yourself while you create your will. Determining who is in a good position to be the caretaker for your children is a question worth asking yourself at this stage of your life. Remember- just like the property that you own, if you do not designate someone to fulfill this role for your children then a probate court judge will end up making that decision for you. If you can’t trust a judge to make that decision for you with your property, then you surely cannot do so when it comes to your children.
This process involves having a discussion with your spouse and then talking with the person or persons that you wish to name as the guardian of your children when you pass on. Do not put someone in a position where they are blindsided by the news that you have named them as the guardian of your children. This is something that you should discuss with the person ahead of time to gauge their interest and aptitude. Once you feel confident in naming that person as a guardian of your child then the most important aspect of your estate planning will be complete.
Who will serve as the executor of your will?
All the actions in your will- the accounting of the property that you own, determining what if any debts you have, and then distributing the remaining property to your beneficiaries have to be done by someone. That person is known as the executor. This is a massive responsibility and is a role that you can designate someone for within the will itself. You should consider a person who is responsible, intelligent, and trustworthy. You may name an executor and a secondary executor in case the person is not able to fulfill their responsibilities.
Most Americans die without a will
Over half of Americans, approximately sixty percent by one measure, die without a will. This means that most Americans forego the ability to plan their estates and determine who will end up with their property, who will care for their minor children, and all the other benefits of having a will which we have discussed already in today’s blog post. Do not underestimate all the good that having a will can do for you and your family even if you are not wealthy. There is peace of mind that you can provide your family with by simply planning your estate.
Aretha Franklin died without a will
The Queen of Soul died without a will. Despite her half-century and then someplace in the public eye as a successful singer/songwriter/performer, Ms. Franklin did not have a will when she passed away in 2018. If someone like her may think that it wasn't necessary to have a will, you can see why so many of us regular people may believe the same thing. She could have taken the time to create a will but she didn’t. What ended up happening was that her four sons filed a petition in the county where Ms. Franklin resided to be named her representatives in a probate proceeding. A niece of Ms. Franklin did the same. Sounds like a mess. More importantly, it was a mess that could have been avoided.
What would Ms. Franklin tell you about drafting a simple will? While we can never know for sure, she would likely recommend having a will. That situation we discussed earlier in this blog post about not having your family fight over your estate can be solved by having a will and then reading that will to your family before your passing. That will take most of the shock and surprise out of the equation when you do pass away. Better to have your family get upset with you while you are alive rather than at each other after you have passed away.
Rich and famous or not- get a will
When we talk about your estate, we mean your financial accounts, real estate, personal property, and other items that you own. This is what it means to plan your estate. Taking the time to determine what you own and where you want to see it go may not be the most fun you will ever have but it is time well spent. Consider that you may be worried about a thousand things right now in your life. However, how many of those things are going to be important to you in five years? This is a question that I ask myself often. How much of this that I am so concerned with right now is going to matter to me in just a few years?
Now put yourself in the shoes of a rich celebrity. Do you think that this person has anything to worry about? I'm going to guess the answer to that question is "yes." No matter who that famous person is or what their current circumstances are money cannot buy happiness. That celebrity has plenty on their mind beyond a will. What you can think about is how you can plan out your estate with the resources you have. You don't need to be as rich as a celebrity to put the time into estate planning. There is no substitute for diligence and time.
You already own some property, most likely, which can pass to pre-designated beneficiaries without having to do any estate planning at all. These are known as non-probate assets. Examples of non-probate assets include bank accounts, retirement accounts, and life insurance policies. You can name beneficiaries of each of these financial accounts and insurance policies without having a will. You just need to list a beneficiary when you first get the account or insurance policy. Simple as that. These are assets that will pass to that beneficiary without anything having to get done in a probate court.
A question that I have encountered before has to do with what document takes precedence if there is a conflict- your will or a 401(K) beneficiary? Even if your will says that your spouse gets the 401(K), but your mother is listed as the beneficiary on the account then the account documents will trump your will. You may have started that 401(K) before you were married which explains why your mother is listed as your beneficiary. Therefore, it pays to go through these accounts when major life events occur. The last thing you want is for your mother to receive property of yours that you intended to pass on to your spouse.
Powers of attorney can also come in handy
Becoming incapacitated is a major fear for many of us. The idea that we could be humming along one minute and then unable to make decisions for ourselves or even more independently is enough to make anyone worry. However, this is a possibility that all of us should consider. Specifically, within the context of estate planning. While you are already planning your future why not take the time to bulwark your present if you become incapacitated but do not pass away?
There are different kinds of power of attorney that you can set up for yourself. Perhaps the most well-known are medical powers of attorney and financial powers of attorney. These are forms that not surprisingly allow for another person (named by you) to exert control over your finances and medical decision-making if something were to happen to you and you were to become incapacitated. Let this person whom you name as having power of attorney over your finances make tough decisions if you become incapacitated rather than someone else.
What documents do you have hanging around?
As a general housekeeping matter, it is easy to fall behind when it comes to organizing our paperwork. We all have that file, virtual or an actual file cabinet, which tends to be bursting with documents- many of which we don't use at all. While you are concerned with keeping these items organized so many competing interests can come across your desk and lead you to lose interest in estate planning. When your executor or estate administrator needs to get organized, having your financial documents in one place can be a huge help.
If you are not able to do this then you are putting your family in a position where they are going to have to look through your computer, file cabinets, and other physical locations to find the important financial documents which pertain to your estate. If it is hard to find these documents even in the best of times, imagine how difficult it will be for them to focus on this task while still grieving your loss. You can remove this effort from the equation by getting your financial documents together. This is a simple task and one that you can arrange to do easily.
Once you have your documents organized, I would recommend that you take the time to talk with your executor about where he or she can locate them. Create a list and email him or her a copy. Do as much as you can virtually and store this information in the cloud. The last thing you want to do is hand your executor a list and then have him or her lose it. We are all human and this has happened more than once in the world of estate planning. Have multiple copies, keep them online or in the cloud, and then you can worry less about what will end up happening to your estate.
Assess your plan as needed
Do not fix your will and then forget it. Rather, you should check on the will every so often to make sure that the will still matches up with your life. For example, if you created the will years ago when your parents were still alive, you weren’t married and you had no kids then it is likely that the will you have does not match up with your current situation. To remedy this, you can make changes to the will when needed and communicate those changes to the executor.
When it comes to assessing your current estate planning goals, we think that the best place to start this journey is to work with an experienced estate planning attorney. Do not take for granted the time that you must create an estate plan and how much you can benefit from working with an experienced estate planning attorney.
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 attorneys offer free-of-charge consultations six days a week in person, over the phone, and via video. These consultations are a great way for you to learn more about the world of Texas estate planning and to have your questions answered.