Friday, September 23, 2011

Will Lawyer In Houston Explains the Basics of Estate Planning and What That Means For YOU

When a person with assets over $100,000 passes away, their assets will be handled in one of three ways:
 
(1) if they had no will, their assets will be distributed as mandated by the Texas probate code through a court proceeding called probate;

(2) if the person had a valid will, the estate will still have to go through the Harris County probate process, but the court will carry out their wishes as stated in their will; or

(3) if the person had a valid living trust (and their assets were re-titled in the name of their living trust), their wishes would be carried out in private, without the court's involvement. 
 
So ... why does it matter to you? 

The answer to this question depends on how much you care about what your loved ones have to deal with after you are gone and how much control you want to have as to who gets what, and when and how they get it. 
 
If you do nothing, you get no input on any of these questions and the court and one of your eager family members/friend/creditor who petitions the court will make these decisions on your behalf through a process called probate.  Why do you care about probate?  Often, the probate process can take 6-12 months, can be extremely costly, and the process is completely public.  The probate process can often lead to squabbling between family members and airs the family's dirty laundry. 
 
If a person leaves a valid will, it will still have to go through the probate process described above, but the court will have the benefit of knowing how you want your affairs handled.  Instead of relying on the laws of intestate succession (which is the law that distributes your assets to your family members in the order of their relation to you), the court will pass on your assets to the specific people you have identified in your will. 

Through a valid will, you can control WHO gets your assets, but you will have no control as to HOW and WHEN they get it.  
 
A living trust (that has been properly funded), on the other hand, gives you more control.  If you are working with an attorney who has expertise in this field, you can control WHO gets your assets, and WHEN and HOW they get it without the court's involvement.  Even better--with a living trust, it is a private administration and can generally be handled in a short period of time.    
 
You may be asking yourself: why would someone in Texas ever do a will instead of a living trust?  Typically, a person will choose a will over a living trust for one of two reasons:

(1) they don't know the difference between the two, or
(2) the "cost" of doing a living trust.  
 
There are some obvious advantages to doing a living trust over a will, but starting with something is better than nothing.  If you are not yet ready to make a leap into the world of living trusts, a basic, will-based estate plan is a starting point.  In addition to giving the court direction about how you want your assets distributed, a will-based estate plan should also include your advance health care directive (which identifies the person(s) that will make health care decisions for you, if you are incapacitated) and a durable power of attorney (which identifies the person(s) that will make financial and legal decisions, when you can't). 

While we all care about what happens to our assets, every person over the age of 18 needs to have an advance health care directive and durable power of attorney.