“It’s important to have an estate plan.” At this point, you have probably heard this numerous times during your life. But, do you know why it is important to have an estate plan? While most people have a general understanding of the benefits of estate planning, far fewer people have a clear understanding of the reasons why they should have a plan in place.
There are, in fact, several reasons to have an estate plan. This is true regardless of your age, health, wealth, and family circumstances. While certain circumstances can make certain aspects of estate planning more important than others, all adults in Texas should have an estate plan—and they should develop a plan that addresses their specific goals, wants, and needs.
10 Reasons Why Everyone Should Have an Estate Plan
So, why should you spend the time and effort to prepare an estate plan? Here are 10 reasons why everyone should have an estate plan in Texas:
1. Deciding Who Gets What
Preparing an estate plan allows you to decide who will receive your assets when you die. You can be as specific as you would like—and it is often best to be as specific as possible. You can include terms in your estate plan that will cover assets you acquire in the future; and, if you establish a trust, you can specify how you want your assets managed and when they should be distributed after your death. This can be particularly useful for parents of minor children who want to ensure that the money they leave behind will be preserved until their children are able to use it responsibly.
2. Avoiding Texas’s Intestate Succession Laws
If you don’t prepare an estate plan to distribute your assets, the alternative is that your assets will be distributed according to Texas’s intestate succession laws. “Intestate” is the legal term for “without a will.” These laws provide that certain family members will receive certain percentages of your estate, and these percentages vary depending on whether you are married, whether you have children (and if so how many), and various other factors.
3. Designating a Personal Representative
When you die, someone needs to manage your final affairs. The person who steps into this role is your “personal representative.” You can designate a personal representative in your will, and you can also designate a “backup” personal representative just in case your first choice isn’t available.
If you don’t prepare an estate plan and designate a personal representative, a personal representative will be chosen for you through the probate process. This slows down the process of administering your estate and can lead to additional costs for your family, and of course, it leaves the decision out of your control.
4. Designating a Guardian
If you have minor children, it will also be important for you to designate a guardian in your estate plan. This is the person who will take care of your children until they turn 18 should you die unexpectedly. Similar to designating a personal representative, designating a guardian avoids unnecessary delays, costs, and uncertainty, and it lets you know for certain that your children will receive the love and care they deserve.
5. Avoiding Probate
When a person dies without an estate plan in Texas, his or her entire estate must be administered through the probate process. This takes time, it costs money, and it increases the risk of disputes among your family members. By preparing a comprehensive estate plan, you can structure your estate to avoid probate, and you can ensure that the estate administration process will be as simple and straightforward as possible for your family.
6. Avoiding Unnecessary Taxes
For many people, estate planning will involve tax planning aspects as well. Taxes can significantly reduce the amount of your estate that passes to your loved ones, but it is possible to make strategic decisions that avoid unnecessary taxes in many cases.
7. Planning for Your Future Healthcare Needs
In addition to addressing matters that will arise after your death, preparing an estate plan also allows you to plan for certain events that could happen during your lifetime. In particular, this includes planning for incapacity. If you get sick or severely injured and are no longer able to make decisions regarding your medical care on your own, you will need someone you trust to make these decisions for you. Preparing a medical power of attorney and a living will serves this purpose.
8. Planning for Your Future Financial Needs
If you were to become incapacitated, you would need someone to manage your financial affairs as well. The estate planning tool used to address this contingency is a durable power of attorney. Durable powers of attorney, medical powers of attorney, and living wills all only take effect in the event of your incapacity, and you can update them as necessary as your needs and preferences change over time.
9. Addressing Unique Estate Planning Needs and Goals
If you are like many people, you will have some unique estate planning needs and goals. For example, maybe you own a business, or maybe you want to leave a portion of your estate to charity. Preparing an estate plan is the only way to address these needs and goals in the way that you desire.
10. Protecting and Providing Certainty for Your Loved Ones
Finally, and perhaps most importantly of all, preparing an estate plan protects your loved ones. By preparing an estate plan, you will ensure that your loved ones do not have to make difficult decisions without your guidance, and you will give them much-needed certainty regarding your wishes and final affairs.
Schedule a Free Initial Consultation with a Plano Estate Planning Attorney
If you would like to speak with an attorney about preparing an estate plan, we encourage you to get in touch. To schedule a free initial consultation with a Plano estate planning attorney at Vecchio Bloomenstiel, PLLC, please call 972-881-9700 or request an appointment online today.