It’s always a good time to begin planning for the future. Tracking expenses, rebalancing investment portfolios over time, and purchasing life insurance policies all play a valuable role in giving us peace of mind. Unfortunately, many Round Rock residents forget to consider one of the most important aspects of planning for the future: their estate plan.
This is especially troubling when one considers the time, stress, and expense that often accompanies an unprepared estate. Williamson County’s probate court, the court that serves Round Rock, is a good example of the time required to resolve unprepared estates; its probate timelines regularly stretch to over one year.
The probate process, however, does not have to be a daunting task. In fact, even a small amount of estate planning can help alleviate many of the probate process’s biggest headaches. Some clients are understandably not comfortable with discussing estate planning topics, such as death. But sometimes it is necessary to face these uncomfortable topics in order to protect the interests of our loved ones. Estate planning does that. Please read below for a brief overview of estate planning terms and techniques and how they can help realize your goals.
Estate planning is the process of preparing for the disposition of an individual’s property in case he or she passes away or becomes incapacitated. Your “estate” consists of all your legal property: your car, home, personal possessions, bank accounts, mineral rights, etc. Property can be divided among heirs, gifted to a favorite charity, sold – the possibilities are endless. And not only can you decide how and to who your property will be passed, you can also decide on when it will pass. Your wishes for the disposition of your property are compiled together into your “estate plan,” which usually consists of a will, but can also incorporate a number of different documents and instruments.
Just like your investment strategy, an effective estate plan will need to be revisited from time to time. Generally, significant events such as the birth of a child, marriage, divorce, or a change in assets are sufficient reason to review your estate plan and make sure it continues to reflect your wishes. We have helped countless clients in Round Rock draft and maintain their estate plans. Continue reading for a brief overview of some of the most common estate planning instruments.
A Power of Attorney can be a very valuable tool for your family or estate administrator in the event that you become incapacitated before your death.
A Power of Attorney is a legal document which allows another person to make decisions for you if you become unable to make those decisions yourself. Similar to the way an attorney is your legal representative, this document allows a person of your choosing to buy, sell, lease and dispose of all forms of property, and much more. Of course, you can place whatever limits you like in your Power of Attorney.
Related to the general Power of Attorney are the Living Trust and the Medical Power of Attorney. Together, these documents let you share your desires even if you cannot communicate them directly. These documents commonly detail instructions regarding end-of-life care, medical information disclosure permissions, or instructions should you fall into a non-communicative state. For example, you can choose to include your preference for a specific Round Rock health living facility.
A will is a document executed by a an individual, or testator, that directs another, the executor, to distribute the testator’s property after the testator’s death. If a person dies without having executed a will, that person is said to have died intestate. Dying intestate puts that person’s estate at the mercy of the state’s default probate rules, which likely won’t perfectly align with the deceased’s wishes. Therefore, it’s highly recommended that all people have a will drafted to memorialize their wishes. Following the death of a testator, the will is entered into probate by the judge and the executor can begin distributing the deceased’s estate according to the provisions in the will.
Though many websites advertise inexpensive “all-in-one wills,” these forms can rarely fully accommodate the testator’s wishes. And in some worst-case scenarios, flaws in the execution of all-in-one wills could lead to an invalid document altogether.
A trust is a fiduciary relationship created by the grantor, which directs the trust’s manager, trustee, to manage the trust’s property for the benefit of the beneficiaries. Unlike the property distributed by a will, which the testator has legal title of, the trust itself retains legal title of the trust’s property. Trusts have risen in popularity significantly since the 1970s. This rise is warranted for many reasons, however for many, a trust will typically only form one component of a comprehensive estate plan. One reason to include a trust in your estate plan would be to retain some control, and enjoy the benefit of your property even if you have diminished capacity. This instrument achieves goals similar to that of a Power of Attorney, but allows the grantor a higher degree of control over the property. Additionally, trusts can reduce probate costs for those with property in more than one state.
If you are concerned that your estate plan no longer reflects the value of your property or your current goals, or if you have yet to create an estate plan, contact a Round Rock attorney at Kirker | Davis LLP to schedule a meeting with an attorney today.