Estate Planning. You hear the term, but do you know what it is exactly? Does it mean having a will drafted? Perhaps it means a will and power of attorney. In this blog I will go over the term estate planning.
If you Google the term Estate planning, you will likely find estateplanning.com near the top. The website starts off by explaining that everyone has an estate and that it is comprised of everything you own. That would include your car, home, real estate, checking and savings accounts, life insurance, furniture, etc. However, that still does not tell us what estate planning means.
When you die --- that should not be a shock to anyone because everyone is doing it – someone has to take control over your worldly possessions. Estate planning is your instructions on what to do with your “estate” and includes the who, what and when. For example, who will receive your property, what exactly are they receiving, and when will they receive it?
Your property will be distributed upon your death whether you make plans or not. The question is whether it is distributed according to your wishes or the state’s wishes.
At first glance estate planning may seem pretty straight forward. However, when you look closer it is not always simple. Perhaps you want your brother to receive your horses. You don’t believe it is necessary to write a will for that. However, without a will you are allowing the state to decide who receives your horses. Whether you are married or single, have children from a prior relationship, when you bought the horses, and whether you have living or deceased brothers or sisters all impact who receives your property when you die without a will.
When you draft a will, you should express clear instructions on how to distribute your property. If your will is not drafted properly, then it may not cover all your property. That means the state will decide who receives that piece of property that was not covered. If it is not drafted properly, it may not address what happens if your brother passes away before you do. Perhaps you want your niece to have the horses, but what happens if you pass away while she is still in elementary school? Now what? She is too young to own property, so when should she receive rights to the horses? Does your former sister-in-law, who you do not like, get to enjoy the horses?
These are some of the circumstances you should consider when you make “plans” to give your “estate” to others when you die.
Although some people believe estate planning is just for “rich” people, I would argue that it is more important for people who have moderate assets or no assets but young children. When you have only moderate assets, your property likely means more to you and your relatives. When you have small children, you should want to conduct estate planning to ensure they are raised by the person you choose, not a person the state chooses.
Estate planning comes down to instructions. And, formalizing your instruction through legal documents such as wills and trusts. If you would like assistance in creating your estate plan, contact me at 210-874-5700 or email me at hspires@TexasWillsLawyer.com or complete a contact form on www.TexasWillsLawyer.com.