Does Texas Estate Planning Really Work?

By PeterFalcon | Jun 11, 2010 | 0 Comments | Rating: 0

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Many people refuse to do Texas estate planning or even make one of the Texas wills. These are the same people that will purchase a map before taking a trip to an unknown destination. These people have found a map makes the process easy. Like a map to a new place, a will is simply a roadmap states the drafter's wishes upon his or her death. An estate plan outlines this process while minimizing potential taxes and fees, leaving more of the estate for the heirs.

This decision to control who inherits the property and when starts with current financial information and a complete inventory of all the assets. A Texas estate plan and Texas wills list all the assets of the owner and clearly state who will inherit each item or share of each item. These include the home, other property, investments, businesses, life insurances, retirement plans and personal property.

This is simply a way of setting up legally effective arrangements ahead of time so the estate can quickly be passed to the rightful heirs. This procedure will play what if; what if the spouse dies first, what if a child dies first, who make financial decisions for minor children, who will raise minor children, does a share of the estate go to the child and spouse or just the child, what happens to a business or other assets. When people die without a will, someone else makes all these decisions. That person will be a stranger who will follow the law and disburse the estate to the located heirs after doing all the lengthy investigations and paying all the considerable fees.

All wills in the state of Texas must be probated. Probate can be very simple with a properly drafted will. Living trusts do not need to be probated; the property is held by the trust not by the person. In the state of Texas property held in a trust is handled under the trust laws, not probate laws. A competent trust attorney will be able to explain in great detail the differences and the advantages and disadvantages between wills and trusts.

Texas does not currently have an estate tax. The estates of people who died prior to January 1, 2005 had to file proper paperwork and possibly pay fees. The federal government does have an estate tax on estates over a certain value. In 2009 the value of the estate had to exceed 3 1/2 million dollars; currently the estate value is $1 million. This tax can be as high as 45% of the value of the total estate.

It makes sense to do texas estate planning and have a trust or one of the Texas wills. With careful planning, any estate tax consequence can be reduced. These leave a clear roadmap for other people to follow and make sure the right heirs receive the correct inheritance gift.

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