Do I Need More Than a Will for My Estate Planning?
A thoroughly planned estate will have more than a will. A will has no validity until the court has given it validity, and therefore is essentially a preparation for probate. You must file probate, go to court to get the will verified, and issue the letters of testamentary. Other items are needed if you want to avoid going to probate. Probate can be expensive—$3,000 to $4,000—depending on the type of probate. With additional estate planning, you can avoid probate, by utilizing beneficiary designations on cars, financial accounts, and properties.
Sometimes you need to plan for probate. In cases where you have a special needs child, a child with a history of drug abuse, or other family members that cannot get along, then court involvement can be necessary. In these cases, just a will can suffice with the intention of going through probate.
Do I Need a Trust as Part of My Estate Plan?
In my opinion, most Texans do not need trusts; they cost more and take more effort than regular planning. If you have a high estate worth, currently $11 million or more, trusts are something to consider, but the extra complicities of a trust often are not worth the initial expense for the average Texan.
When considering if taxation is a reason for having a trust, currently a trust will only help in regard to taxation when federal estate taxation is involved which does not occur until the estate value is over $11 million. There are different tax filings depending on how the trust is set up. If you have a million dollars or less in assets, a trust is probably not needed. If you have a Million dollars or more in assets that is the time that trusts are looked at as possibly being beneficial.
Trusts are an ongoing, more intense, process than a standard estate plan. With a standard plan you will need to periodically check to ensure the plan is still up to date; in some situations, every year, or with others, every five to ten years. With a trust, it is something that you must keep in mind every month. If you have a special circumstance, such as a mixed family, it is worth discussing with an attorney to see if your situation warrants a trust. Generally, trusts are much more complex than the average Texan requires.
What Is a Healthcare Directive and Do I Need One?
A healthcare directive, also known as a living will or a directive to physicians, is a personal statement to the world of how you want to be treated if you are incapacitated. There are two different types of conditions where this applies. The typical document speaks to a terminal illness, where you’re expected to pass within six months, or a permanent incapacitated state. In either case, how do you want to be treated? Do you want them to do everything to keep you alive, as long as possible, or allow you to pass peacefully?
Creating a healthcare directive is a very personal decision. During an initial consultation, we discuss the topic with clients to provide time to discuss and think it over before we come to the final signing. Sometimes clients decide they still haven’t decided yet, so we discuss further and leave it open to completion. Directives can be tailored to meet any client’s needs. You must think carefully about the specific language, the two options that are in the statutory form are, (1) remove the machines and allow the person to pass peacefully or (2) keep alive, using extreme or heroic measures, for as long as the person survives.