Estate planning is a general term that refers to a deliberate decision-making process.  A process in which you consider the assets you own, discuss your needs and those of your family, and then decide (for each conceivable life stage or circumstance) the rules that will govern how your property is held, managed, and distributed.  The stages of life to consider include seasons in which you are healthy, or a time when you (or a spouse) may be incapacitated, and ultimately after your death.

For each of these stages, an estate plan will determine:

(a)  CONTROL.  Who you trust to be in charge of your care and the management of your resources,
(b)  ACCESS.  Who can benefit from those resources, and
(c)  TIMING. How and when that will happen.

Once your answers to these key questions are decided, then someone – usually an estate planning attorney – creates the document set that reduces those decisions to writing.

A thorough estate planning process is also a stewardship process.  Depending on the types of assets you own, and their value, your plan should enable those assets to be held, administered and distributed in a way that:

  • Minimizes or eliminates taxes, including –
    • Estate taxes
    • Capital gain taxes, and
    • Income taxes
  • Minimizes administrative costs associated with holding and distributing those assets;
    • How much, if at all, will the probate courts be involved?
    • Will decisions be made by people you trust privately, or will those trusted persons need probate court approval?
    • If you are incapacitated, are the risks of needing probate court intervention minimized or eliminated? Or is guardianship still a possibility? 
  • Balances the respective interests of a first spouse to die and those of the surviving spouse;
    • What will happen to the deceased spouse’s share if the survivor remarries?
    • Will the deceased spouse’s share provide asset protection for the surviving spouse?
    • Will that share be protected for your children? Or might it be redirected by the survivor to a new family the deceased spouse never knew?
  • Protects the inheritance your children will receive from being forcibly taken in a divorce, a lawsuit, during incapacity, or otherwise lost or wasted?

Finally, an estate plan is an exercise in freedom.  The state of Texas has a plan for how your property will be inherited, if you don’t replace that plan with one of your own.  We believe you are far better suited than the State to determining who will be in charge, who can benefit from your life savings, and when and how that will happen. But make no mistake. The state does have a plan that will answer all three of those key questions, and that plan will decide those issues, unless you take action to replace it with an estate plan of your own.  How different is the state’s plan, you might ask?

Under the state’s plan:

  1. Minors will inherit their entire share of your property at age 18, with no restrictions or protections on how they can spend it.
  2. There is no asset protection for anyone in the state’s plan.
  3. The needs of beneficiaries with special needs will be decided by a probate judge, not you.
  4. The person in charge of distributing your estate may well be a stranger, not a family member.  That’s just an introductory few differences.