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By: Joshua Massingill, Esq. Many people think they can’t afford to make an estate plan when, in reality, they can’t afford not to. Estate planning is an investment—one that can provide clarity, stability, and protection for your family and loved ones when they need it most. Without an estate plan, Texas law—not you—will determine who receives your property at death. A judge may also be required to decide who will care for your minor children and even your pets. If the idea of leaving those decisions to the court system is unsettling, that discomfort is often the clearest sign that an estate plan is overdue. A comprehensive estate plan typically includes either a will or a living trust, along with other essential documents such as financial and medical powers of attorney, directives to physicians, HIPAA authorizations, and instructions regarding final disposition. Together, these documents allow you to make critical decisions about your property, your healthcare, and the people who depend on you. Most people do not wake up one morning with a sudden desire to plan their estate. Instead, planning is usually prompted by a life event: the illness or death of a loved one, a marriage or divorce, the birth or adoption of a child, or even milestones like a child starting school or leaving for college. These events force us to confront questions that are easy to postpone—but difficult to ignore. Although the benefits of estate planning are well understood, many people delay because the process requires confronting uncomfortable topics. For parents, the most difficult decision is often choosing guardians for minor children. This choice can be emotional and occasionally contentious, but clients who work through it almost universally describe a profound sense of relief once the decision is made. Attorneys often cite three primary goals of estate planning: transferring assets from one generation to the next, avoiding probate, and minimizing estate taxes. While these are important, they are far from the whole picture. Estate planning is also about naming guardians, planning for potential disability, coordinating eligibility for government benefits, and protecting assets from creditors, divorce, or mismanagement. One of the most persistent myths is that estate planning is only for the wealthy. That assumption is simply wrong. Consider the following example. Anna is a Doctor of Chiropractic earning $90,000 per year. She is 29 years old, married, and has two young daughters. Why should Anna plan her estate? First, although Anna’s estate may be modest today, it is unlikely to remain that way. Over time, income growth, retirement savings, investments, and occasional windfalls can substantially increase the value of an estate. In addition, certain tragic events—such as a fatal accident caused by a third party—can significantly increase the size of an estate through litigation or settlement after death. Second, Anna may want to ensure that the right people care for her children if she and her spouse pass away. Estate planning is not just about money. If Anna believes she is better equipped than the court system to choose guardians for her children, a properly drafted estate plan is the only way to ensure her wishes are honored. Third, if Anna dies without a valid will, her spouse’s ability to manage or dispose of her property may be limited by statutory claims of children or other heirs. Estate planning can eliminate unnecessary uncertainty and administrative burden during an already difficult time. One of the most fundamental estate planning decisions is whether to use a will or a living trust. Both are powerful tools, and each has advantages and disadvantages depending on the client’s goals and circumstances. Wills are generally simpler and less expensive to create. However, they must be probated after death. While probate often has a negative reputation, Texas is considered a probate-friendly state. Independent administration allows an executor to settle the estate with minimal court involvement—provided the will authorizes it or all beneficiaries agree. Even so, probate is a public process and can still involve delay and expense. Living trusts, by contrast, can avoid probate altogether and may offer additional benefits in certain situations. They typically require more upfront work and expense. A trust must be properly funded, meaning assets must be transferred into the trust during the grantor’s lifetime. Real estate, vehicles, and certain financial accounts must be retitled, and insurance carriers and lenders may need to be notified. While these steps are manageable, they do require attention and follow-through. Trust-based plans should always include a “pour-over” will. This document acts as a safety net, ensuring that any assets not formally transferred into the trust during life are directed into the trust at death. It provides peace of mind and prevents accidental omissions from undermining the overall plan. In some cases, a will itself creates a trust upon death. These are known as testamentary trusts. Testamentary trusts are commonly used for young beneficiaries, as minors cannot directly receive substantial assets. A trustee is appointed to manage the funds until the beneficiary reaches an age or milestone specified by the testator. The bottom line is simple: failing to plan is, in effect, planning to let others decide for you. Even a basic estate plan is vastly better than none at all. The desire to make perfect decisions should never be an excuse for making no decisions. This article is intended as legal education, not legal advice. Every individual’s situation is different, and you should consult with a qualified attorney regarding your specific circumstances. This article is courtesy of Joshua Massingill, TCA Attorney and Lobbyist of Statecraft, LLC and TCA Affiliate Member Massingill Attorneys and Counselors at Law.
This article is courtesy of Joshua Massingill, TCA Attorney and Lobbyist of Statecraft, LLC and TCA Affiliate Member Massingill Attorneys and Counselors at Law.