If you’re reading this, you’re one of the millions of Americans who need an estate plan. Why? The short answer is “Everyone, age 18 and older needs an estate plan.” It doesn’t matter if you are old or young, Bezos-rich or just starting adulthood, the fact is, you need a written plan to keep you in control and to protect yourself and those you love.
The Key Takeaways
Every adult, regardless of age or wealth, needs both a plan while they are alive, and an after-death estate plan.
- Planning for incapacity will lets you exercise some control and lets your trusted loved ones care for you without court interference
- Every adult needs up-to-date health care directives
- You should also leave written instructions to make sure you are the one who selects who’s in charge of when and how your assets will be distributed.
- We all need the counseling and assistance of an experienced estate planning attorney.
What is an Estate Plan?
Your estate is comprised of the assets you own—your car, home, bank accounts, investments, life insurance, furniture and personal belongings. No matter how large or how small your estate, you can’t take it with you when you die, and you probably want certain people to have certain things you own. The term “assets” has also expanded to include your digital life as well, assets can include cryptocurrency, photos, emails, blogs, social media presence, and other online content we generate during our lives.
To make sure that happens, you need to provide written instructions stating who you want to receive your assets and belongings, what you want them to receive, and when they are to receive it—that is the essence of an estate plan. If you have young children, you will need to name someone to raise them in your place and to manage their inheritance.
A properly prepared estate plan also will have instructions for your care (and the management of your assets) if you become incapacitated, even for a short time, due to illness or injury. Without the proper documents in place, your family may need to ask the court for permission to use your assets to take care of you and to oversee your care. That process (known in Texas as a guardianship) is out of your control, takes time and costs money. This makes an already difficult situation even more difficult for your family.
It might surprise you, but having a plan in place often means more to families with modest means because 1) they can least afford to pay unnecessary court costs and legal fees and 2) state laws, which take over in the absence of planning, often distribute assets in an undesirable way. Here’s an example:
Sam was married to Meg. Sam had two young children from a previous marriage and Meg has helped to raise them as her own. Sam died in a car accident on his way to work. Because he had no estate plan, laws of the state of Texas divided his estate into thirds: one third went to Meg and one third to each of his children. Meg, a stay-at-home mom, was forced to go back to work. The court set up guardianships for each child, which required ongoing court costs, including accounting, guardianship and attorney fees. By the time the children reached 18 and received their inheritances, there was not enough left for them to go to college.
Building an Estate Plan
As tempting as it is to DIY your estate plan, don’t try to do this yourself. Texas’ estate planning and probate laws are intricate, and you’ll need an experienced estate planning attorney to carefully craft the appropriate documents, to ensure what you think will happen when you become incapacitated or die actually happens.
Actions to Consider
- Call or email our office now to set up an estate planning consultation appointment. We make tough topics manageable to discuss and talk about.
- Don’t worry about how life will unfold; the best practice is to have your plan prepared now based on your current situation.
Nielsen Law PLLC provides family focused estate planning to individuals and families in Austin, Round Rock, Cedar Park, and the Central Texas area. For more information and to learn about our firm, please contact us.