Texas Estate Planning Lawyer
Estate planning is an incredibly important process that many individuals and families overlook. It’s never too early to start planning for the future. Creating an estate plan provides invaluable peace of mind knowing that your family is protected regardless of what the future brings. Whether you want to write a will, create a trust, or just have general questions about the estate planning process, Javia Law is here to help.
Our experienced Texas estate planning lawyers serve clients in Dallas, TX, and throughout the state of Texas. We take a comprehensive approach to estate planning because our goal is to tailor a solution to address each client’s wishes and needs along the way.
What Does an Estate Planning Attorney Do?
An estate planning attorney helps individuals and families put plans in place to address a wide range of situations that are likely to occur in the future. For example, an estate planning attorney creates wills, trusts, powers of attorney, advance directives, and other estate planning documents. Additionally, estate planning attorneys can be instrumental in planning for the possible need for long-term nursing home care. This involves identifying suitable facilities and determining how to pay for care. Most estate planning lawyers also work with individuals and families who have significant assets they want to protect from creditors, such as in the event of a lawsuit, divorce, or bankruptcy.
The Most Common Estate Planning Documents
Every estate plan—just like every family—is unique. However, there are a few documents that find their way into most estate plans:
- Last will and testament;
- Trusts (revocable living trusts, irrevocable trusts, testamentary trusts, special needs trusts, etc.);
- Medical power of attorney;
- Financial power of attorney;
- Directive to physicians; and
- HIPAA waiver.
Together, these documents help ensure that your wishes are honored.
What Is a Will?
A will is a legal document that accomplishes several basic estate planning goals. In your will, you outline how you want your assets and property distributed when you die. You also name a personal representative (executor) who will oversee the administration of your estate. A will is submitted to the probate court and is basically an “admission ticket” to probate.
Under Texas law, there are specific formalities wills must meet to be valid. It is important that your will is properly executed because dying with an invalid will is the same as dying with no will at all.
Finally, if you have minor children and want to avoid the conservatorship process, you can also name the guardians for your children in your will. A will is a good place to nominate the guardians (back up parents) you choose for your minor children in the event of an unexpected death.
What Is a Trust?
A trust is a common estate planning tool that provides individuals and families with an alternative method for transferring assets. Depending on your legal, personal, investment, and tax planning needs, a trust may be beneficial based on your situation. On the most basic level, a trust is a three-party relationship between:
- The grantor (the person who creates the trust);
- The trustee (the person who administers the trust); and
- The beneficiaries (those who benefit from the trust).
There are many types of trusts, and each comes with its own advantages and disadvantages. The most common advantages of using trusts include that trusts may be used to
- Transfer your assets to your beneficiaries without probate, which can be a costly and time consuming process;
- Avoid or minimize estate and gift taxes;
- Ensure financial privacy after death;
- Name who you want to be the trustee of the trust;
- Document a plan for managing your personal and/or business assets in the event you become disabled or incapacitated;
- Set aside assets for special needs or minor child or dependent upon your passing, and
- Establish requirements that your beneficiaries must meet in order to receive or access their inheritance.
Trusts can be revocable or irrevocable.
Revocable trusts offer incredible flexibility that can be quite helpful if your plans change. Revocable trusts can be changed or revoked during the trust creator’s lifetime. Perhaps the most common type of revocable trust is a living trust. A revocable living trust in Texas allows the trust creator to use their assets during their lifetime and then seamlessly transfer those assets to beneficiaries when they die. Assets held in the trust avoid the probate process. However, a revocable trust does not provide asset protection. Since assets remain available to the grantor during their lifetime, the assets also remain available to the grantor’s creditors. Also, the assets still count as estate assets owned by the grantor for Medicaid eligibility purposes.
Irrevocable trusts, on the other hand, are much less flexible than revocable trusts in that they cannot be modified or terminated once created. Assets and property transferred into an irrevocable trust cannot be taken out later. However, assets transferred to an irrevocable trust avoid the probate process and are excluded from the grantor’s estate. Therefore, irrevocable trusts are a very useful tool if you want to reduce the taxable value of your estate and cost of wealth transfer such as probate fees, gift taxes, and estate taxes. Irrevocable trusts also effectively protect assets from creditors and remove them from Medicaid eligibility consideration.
What Is The Difference Between a Will And a Trust?
Many estate plans use both wills and trusts as both are equally important. Choosing which one to base your estate plan around is an important decision. Although both a will and a trust can be used as tools to transfer your assets to your loved ones after you pass, there are differences between the two.
A will is a legally enforceable document that transfers your assets to your loved ones after you pass. However, your loved ones must hire a probate attorney and go in front of a probate judge to have your will “probated” after you pass. The court must validate your will before the court will permit your personal representative to distribute your assets.
A trust is a private document that does not require probate, even if the trust holds assets like your house. Trusts are commonly used as tools to make administering an estate more convenient for your loved ones by avoiding probate. Trusts are also often used for asset protection from creditors, divorce protection, and as a way to reduce estate taxes owed when transferring assets to your loved ones.
Our estate planning attorneys can provide you with the information you need to decide which one is best for your needs.
What Is a Power of Attorney?
A power of attorney is a legal document that allows for one person to make certain decisions on behalf of another person. The person executing a power of attorney is referred to as the principal, and the person granted the right to make decisions on their behalf is called the attorney-in-fact.
The scope of decisions included in a power of attorney document vary, depending on the terms of the document. For example, you may assign the right to make medical decisions to one person and the right to make financial decisions to another person. Powers of attorney always expire upon the death of the principal but can be written to survive the principal’s incapacitation. This makes them a useful tool for disability planning.
What Is an Advance Directive?
An advance directive is a legally-binding document in which the drafter outlines the type and extent of medical care they wish to receive in the event they are incapable of expressing their wishes.
Anyone over the age of 18 can create an advance directive. Typically, when you create an advance directive you will also sign a medical release allowing your loved ones to access your health records. Otherwise, healthcare providers may refuse to discuss your condition with your family members.
About the Texas Probate Process
Probate is the process where a personal representative distributes estate assets according to the terms of a will created by the person who passed away (decedent). However, before the court permits a personal representative to distribute estate assets, the court must validate the decedent’s will. Additionally, the personal representative must identify all of the decedent’s assets and debts, settle the debts, and pay any outstanding taxes.
Probate is time-consuming and can be costly in some cases. Thus, many individuals look for ways to minimize the number of probate assets in their estate. Not all assets need to pass through probate. For example, the following assets are non-probate assets:
- Retirement accounts (IRA, 401k, 403b);
- Bank accounts with a Payable on Death (POD) designation;
- Brokerage accounts with a Payable on Death (POD) designation;
- Life insurance policies listing someone other than the decedent’s estate as the beneficiary;
- Property held in most types of trusts;
- Real estate that is held in joint tenancy or as tenants by the entirety; and
- Real estate with a Transfer on Death (TOD) designation.
A probate lawyer can help individuals better understand the probate process, as well as how to minimize the number of assets subject to probate.
Contact the Knowledgeable Estate Planning Attorneys at Javia Law Today
If you have not yet created an estate plan, have questions about the process, or would like to update your estate plan to meet your family’s needs, reach out to our team at Javia Law. We look forward to meeting with you to discuss your needs and explain what we can do to help you reach all of your estate planning goals. We have extensive experience helping individuals, families, trustees, personal representatives, and business owners use trusts to effectively reach their estate planning goals.To learn more, please call or contact us today to schedule a free consultation.