Since coronavirus entered the U.S., our entire nation has been on lockdown. In this climate, the potential threats that COVID-19 poses have weighed on the minds of Americans. It has prompted many to think about mortality and what their families would do without them. This concern has led many to start preparing their estate. But do these individuals know what they need when it comes to estate planning? What pitfalls should they avoid during this process?
Our Austin estate planning lawyer has some tips that could help guide you. And with our state eager to reopen schools and business, these tips could be critical to taking care of your family’s future.
What Do I Need to Start a Solid Estate Plan?
With schools across our state reopening, many fear for the health of children, school employees and teachers. Many school employees, bus drivers and teachers are older and potentially vulnerable to COVID-19. So many of these workers have looked into estate planning as they return to work. They now join the scores of healthcare workers who have started looking into protecting their own estates. But what these individuals need will depend on their circumstances.
- Living Trust – This document places your assets in a trust and names beneficiaries. You can create one of two types of living trusts: irrevocable or revocable. Irrevocable trusts become permanent upon signing and are not subject to estate taxes when you die. However, you can adjust a revocable trust while you are still alive. This allows you to change the terms and beneficiaries of a trust as circumstances dictate, but the state may tax a revocable trust upon your passing. Usually this type of estate document is best suited for individuals with lots of assets.
- Last Will and Testament – This is the most well-known estate document. It distributes specific assets in your estate to specific beneficiaries. These assets can include: money, property, heirlooms, businesses and (in Texas) pets. Wills can also determine guardianship of minor children. For most individuals, a simple will may suffice for their estate, but some may need both a will and a trust.
- Power of Attorney – If you become incapacitated and can no longer make financial, legal or medical decisions, then this document will go into effect. A power of attorney defines who will make these important decisions for you if you cannot. You can make separate powers of attorney for specific types of decisions–legal, medical, business, financial, etc. You can also assign these powers to different individuals depending on the task. What powers of attorney you draft will depend on your circumstances.
What Mistakes Should I Avoid While Estate Planning?
For an estate plan to be effective, you should not be the only person to know about it. If you have a will, someone needs to know where to find it after you pass. The state of Texas will process your estate using the state’s probate laws if your beneficiaries cannot prove a will exists.
If you create a trust, include your beneficiaries in the process so they know your intentions. Similarly, the executor of your will or trust needs to know they hold that key role in your estate plan. Please be sure to notify them.
When drafting a will, you will need witnesses to sign the document. These witnesses cannot be beneficiaries of your estate. Avoid letting inheritors sign your will as witnesses. And do not miss signing the self-proving affidavit at the end of your will. It proves the legitimacy of the document, and missing it could lead to protracted court battles once you are gone.
Also remember, Texas does not recognize hand written amendments to wills. You will need to contact your estate attorney to get any changes added, or a new will drafted.
There Are More Estate Planning Options Available to You!
Making a will in Texas may not be the best or only option available to you. There are still further trust options that you can explore for your estate. A skilled Austin estate planning lawyer can help you find the right combination of documents.
At Sheehan Law, PLLC, our estate planning and probate attorney can give you the guidance you need. Farren Sheehan has over 15 years of experience helping Austinites with their assets. For a consultation, please call (512) 640-0588 or fill out our online contact form.