By creating a Will and/or establishing a trust, you can help ensure that your family, loved ones, and charitable entities you held dear are provided for after your death – without a Will your estate will be subject to intestate succession, devised by the Texas legislature, and charities you would have supported in your lifetime will never receive a share of the estate by intestate succession. By taking the time to create a Will at a minimum, and perhaps trusts as may be needed by your planning objectives, you can also make sure that the people or nonprofits you care about do not have to deal with unnecessary delays, disputes, increased expenses having to go through heirship, and other issues.
Creating a Will or establishing a trust are not necessarily difficult, but the process can be complex. It is a good idea to discuss your situation with an experienced estate planning attorney who can help you understand all of your options and find a creative and custom solution for your particular situation. At Stepp & Sullivan, P.C., we have been helping clients throughout the Houston area for more than 35 years. Our attorneys are here to answer your questions and help you determine the best course of action when it comes to your estate plan.
Contact us online or call our office at (832) 501-2823 to request a consultation with one of our wills and trusts lawyers in Houston.
Your Last Will & Testament: An Overview
In Texas, much like in other states, a person’s “Last Will and Testament” (or “Will,” for short) is a legal document that details how the person’s assets and properties should be divided upon their death. A Will introduces the testator’s family and life station, which is essential in defeating common law marriage claims that have no factual validity but still get made all of the time in heirship cases. A Will also names an Executor or Executrix of the estate;this can be either an individual person, multiple people who will serve concurrently, a corporate Executor such as a trust company or large bank, or a combination of individuals and corporate Executor serving jointly as Co-Executors, who will be responsible for making sure that the carefully drafted terms of your properly executed Will are carried out. A living will, also known in Texas as a Directive to Physicians and Family or Surrogates or simply an advanced directive, details how an individual would like to be cared for at the end of their life.
With your Will, you can:
- Designate how you want your various assets and properties, including real properties, to be divided amongst your heirs/beneficiaries upon your death
- Name any organizations, including charities or professional associations, that you would like to leave money or property to when you die
- Appoint a personal guardian to serve as a caregiver to your minor child or adult child with special needs in the event that you are unable to do so
- Name an individual who will be in charge of managing assets/properties you leave to minor children (if they are under the age of 18 at the time of your death)
- Select someone, known as the “Executor of the estate,” to be in charge of ensuring that your wishes are carried out after you die
It is important that you create a Will because, without one, your family members and loved ones will need to settle your estate through a judicial determination of heirship which can be costly paying the fees of the attorney ad litem who must be appointed in all heirship cases, an invasive public examination of the Decedent’s family and marital history, and eventually leads to a rigid distribution of the estate according to the law of intestacy. Though Texas’s probate process is relatively simple compared to other states like California, it can still be a lengthy, costly, and difficult process and exacerbate already existing complications among family members.
What Is a Revocable Living Trust & Should You Establish One?
If you decide to establish a revocable living trust, you can name a person (either yourself or another party) who will hold legal title to any assets and/or properties you contribute to the revocable living trust. This person is known as the trustee and anyone who stands to benefit from the trust is a beneficiary. Revocable living trusts are considerably more flexible than tax planned trusts (which require an independent third party to serve as trustee as one of many requirements to follow to avoid frustrating the tax planning objectives) but they do not solve every problem, and there are many major misconceptions about revocable living trusts in Texas.
There are many benefits to establishing a living trust, such as the ability for your beneficiaries to completely avoid probate only in certain situations, but trusts are not practical in every situation. In Texas, all estates worth less than $75,000 (calculated under special rules) are allowed to pass through a simplified probate process called a Small Estate Affidavit (SEA) that typically does not even require a hearing in probate court for the judge to sign the Order on. Revocable living trusts can be beneficial for small business owners, as they can place business assets in the trust and name themselves as the primary trustee during the course of their life. Upon death, the trust can be used to transfer business assets to a successor. Most situations would benefit from tax planning in a business succession plan and/or proper funding with life insurance in a buy-sell agreement to reduce risk and potential complications.
Additional considerations you may want to keep in mind include the various types of available trusts. Simple testamentary trusts will do nothing to reduce the harsh bite of the 40% federal estate tax, but more complex types of trusts can help your beneficiaries avoid seeing a large share of their inheritance march off to Washington to pay federal estate, gift, GST, and/or estate income tax. This is particularly applicable for estates of high value, including ultra high net worth estates approaching $11 million+ for an unmarried person.
Discuss Your Options with Our Legal Team
Whether you are interested in drafting a Will for the first time, establishing a revocable living trust, or making modifications to your existing will or trust, Stepp & Sullivan, P.C. can help. Our Houston wills and trusts attorneys understand the ins and outs of estate planning; we can help you find a custom solution that keeps your unique circumstances in mind.
Call us at (832) 501-2823 to learn more about how our firm can help you with your estate planning needs.