Frequently Asked Questions (FAQ)
This discussion provides information of a broad general nature only. The information contained in this discussion does not constitute legal or tax advice.
- I don’t have anything – do I need a Will?
- What happens if I die without a Will?
- What is an Executor?
- What is a Trust?
- What is a Trustee?
- What is a Living or Revocable Trust?
- What are the PROS and CONS of a Living Trust?
- What are the alternatives to a Living Trust?
- What is Probate?
- How can I avoid estate taxes?
- What are Living Wills and Directives to Physicians?
- What is a Medical Power of Attorney?
- What is a Statutory Durable Power of Attorney?
- What is a HIPAA Release Authority?
- Is there anything that will be distributed regardless of what my Will says?
- How can I choose who will care for my children?
- What is a special needs trust?
- What planning should unmarried couples do?
- What planning can I do for my pets?
- How often should I review and/or update my documents?
- Can I create a Will online or with software?
- I have a Will from another state that was written before I moved to Texas. Should I get a new Will now that I live here?
- What other documents should I be thinking about?
- How do I get started with creating my Will and other documents?
- What do I do now that I have gone to a lawyer and have all my documents finalized?
- What areas do you service?
There is no simple answer to this question, but more than likely it is better to have a Will than die without one. People are under the mistaken impression that all personal property and real estate will go to the right people and happen automatically. Any assets that do not have beneficiary designations (i.e. life insurance and retirement accounts) and any accounts that are not jointly owned with right of survivorship or have pay-on-death designations will have to go through probate or some type of process to determine heirship. Without a properly written Texas Will, the probate process can be very time-consuming and very expensive. Determining who will take over your property, even if you just have a house, a car and a bank account, can be very costly and lengthy without a Will.
Also, having a Will is not all about material possessions. For example, if you have children, whether from a previous marriage or current marriage, you would benefit from a Will so you can prepare a trust for your child (since a minor cannot inherit property outright) and also state who you would want to be your child’s guardian. It will also greatly benefit your family and loved-ones if you can simplify the transfer of your property during their time of grief. Otherwise, you are leaving it to them to sort everything out, which can leave them in the position of guessing at your wishes or not even knowing your wishes.
Furthermore, an unmarried couple, even if neither has children and they have little assets, should be extra cautious in making sure that they have a Will and other estate planning documents (i.e. medical and financial powers of attorney, funeral and burial arrangements, etcetera). Otherwise, the default laws in Texas only favor blood relatives.
The bottom line is that the probate process in Texas is relatively quick and inexpensive with a properly written Will. Therefore, you are better off having a Will to ensure that whatever property you have (even if seemingly insignificant) will get into the right hands and be handled by the right people.
What happens if I die without a Will?
If you die without a Will, you have died "intestate" and your property will pass under the Texas laws of intestate succession. How property is distributed depends on whether the property is community or separate and whether the property is real estate or personal. Separate and community property is defined as follows:
What is an Executor?
An Executor (or Executrix if female) is the person (or persons) responsible for carrying out the directions and requests in your Will. An Executor will be responsible for inventory and appraisment of assets, paying estate taxes and debts, and distributing property to your beneficiaries.
If you die without a Will, the person serving in this capacity may be called the Administrator or Personal Representative.
What is a Trust?
A Trust is a legal entity whereby property is held for the benefit for an individual or individuals to be administered according to the specific terms of the Trust by the appointed Trustee. You can select when the Trust terminates, such as when the Beneficiary becomes a certain age or upon the Beneficiary's death.
What is a Trustee?
A Trustee is the individual or individuals responsible for administering a Trust. For example, if you create a Trust for the benefit of your children upon your death, the Trustee will be the one who is responsible and legally accountable for making sure that the Trust property (i.e. funds) is used for the benefit of your child in accordance with your wishes as stated in the Trust language.
What is a Living or Revocable Trust?
Many people wonder what the difference is between a Living Trust and a Will. A Living Trust (also called revocable trusts or inter vivos trusts) allows you to put your assets in a trust while you’re still alive. People often choose to serve as their own trustee, but you can select an individual or a financial institution to manage your Living Trust. When you pass away, become incapacitated or resign as trustee, a successor trustee takes over and manages your property for you or for your beneficiaries. In contrast, a Will only takes effect at your death and spells out how you would want your property to be distributed.
The most common claim by proponents of Living Trusts is that they avoid the probate process. That need is significantly reduced in Texas because our probate system is efficient and inexpensive if – and this is a big if – you have a properly written TEXAS-specific Will that allows for an “independent administration”. In many cases, it will cost you less to set up your Will and go through the probate process than create a Living Trust alone.
Furthermore, a Living Trust does not necessarily eliminate the need for probate. One of the complications of administering a Living Trust is that you must make sure that all of your assets are re-titled in the name of the trust. You would also have to title any after-acquired property in the name of the trust. Any asset that the trust does not “own” could possibly go through probate. Therefore, even with a Living Trust you still need a Will, called a “pour-over” Will, whereby the assets you did not transfer into your Living Trust during your life will be transferred into the trust at your death.
What are the PROS and CONS of a Living Trust?
What are the alternatives to a Living Trust?
For most people, a carefully drafted Will, prepared by a qualified Texas attorney, is an efficient and effective way to manage and distribute your property. An attorney may help guide you as to how to designate your assets, such as life insurance, bank accounts and retirement accounts, so that they do not have to go through probate.
Additionally, a “Statutory Durable Power of Attorney” allows you to designate an individual to act on your behalf in you are disabled or incapacitated. Another document you can prepare is a “Declaration of Guardian in Event of Later Incapacity or Need of Guardian,” which names an individual to manage your person and property if you become so incapacitated or disabled that a guardian must be appointed.
Overall, the Living Trust isn’t guaranteed to save you money or taxes. Texas has inexpensive probate procedures for the size of most estates if you have a properly written Will. Also, if your records are well-organized, your assets are simple (not necessarily small, just easily identified), your beneficiaries aren’t likely to argue, and your probate court and lawyer are efficient, legal costs of probate might be so low that it costs less to pass the property through a Will than via a Living Trust. Finally, with a well-drafted Will, along with a Declaration of Guardian and Powers of Attorney, you can accomplish many of the benefits of a Living Trust in a less complicated and less expensive manner.
What is Probate?
Probate is the legal process whereby a person’s estate is distributed upon his or her death. If you die without a Will, that is called intestacy or dying intestate. Regardless of whether an individual had a Will, probate is the process by which heirs are determined and/or property is distributed. Filing for probate in Texas is efficient and inexpensive with a properly written Texas Will.
How can I avoid estate taxes?
Many clients are concerned about any taxes being due upon their death; however, a lot of clients do not have the size estate that would be subject to taxes. Additionally, there is an unlimited marital exemption, which means that when one spouse dies, the surviving spouse will inherit everything tax free. Currently, the estate tax exemption is $2 Million, which means that if your estate is under that amount, it will pass to your beneficiaries without owing any taxes.
Nevertheless, it is important to remember that if one spouse dies, although his/her share will go to the surviving spouse tax free, when the surviving spouse dies, his/her estate will now include the amount of both spouses. Therefore, many couples choose to do some tax planning in order to avoid taxes being owed upon the surviving spouse’s death.
Avoiding estate tax can be accomplished in a number of ways such as through bypass trusts and other marital trusts. You should consult an attorney and tax professional to learn of the many options that are available to you.
The following is a chart of the current estate tax structure:
What are Living Wills and Directives to Physicians?
A Directive to Physician is the Texas document that is commonly referred to as a Living Will. Living Wills are valid in Texas. This document instructs physicians to withhold or administer artificial life-sustaining procedures in the event of a terminal condition. Many people wonder why they should get a living will (Directive to Physicians). It is critical to have a Living Will because it allows you to make your wishes clear to your family and loved ones and eases their pain in having to make those decisions for you.
What is a Medical Power of Attorney?
A Medical Power of Attorney (or Durable Power of Attorney for Health Care) designates an agent to make medical decisions if you are unable to make them.
What is a Statutory Durable Power of Attorney?
A Statutory Durable Power of Attorney (or financial Power of Attorney) designates an agent to make financial decisions and control property on your behalf. A Power of Attorney gives great financial responsibilities. For example, if you are in an accident and are in the hospital, your agent could help pay your bills and manage your financial affairs in your absence. Sometimes a financial Power of Attorney is filed in the County where real estate is located, although this is not necessarily required. To revoke a Power of Attorney, you generally only need to execute a new Power of Attorney. You may also need to file a revocation if the original Power of Attorney was filed with a court.
What is a HIPAA Release Authority?
A HIPAA Release Authority is a document that specifies who may have access to your medical records. For example, most clients will name the same individuals as in their Medical Power of Attorney so that they may have access to your medical records if they have to make medical decisions on your behalf.
Is there anything that will be distributed regardless of what my Will says?
There are a number of different kinds of assets that may pass outside the provisions of your Will, such as life insurance and retirement accounts and any other assets where you’ve named a beneficiary.
Furthermore, some bank and brokerage accounts may pass outside your Will, such as payable-on-death (POD) accounts whereby your funds will be distributed to a named beneficiary. Also, joint accounts set up with “rights of survivorship” will pass to the surviving account holder(s).
How can I choose who will care for my children?
In your Will, you can select who would take care of your children if you passed away while your children were under 18 years old.
What is a special needs trust?
Trusts for special needs children have specific language that allows a special needs child to still qualify for government assistance.
What planning should unmarried couples do?
The law does not provide for any rights for individuals who are not related by blood or marriage. Therefore, it is essential for couples who are cohabitating, but are not married, to protect one another with comprehensive estate planning.
What planning can I do for my pets?
Is your pet a member of your family? Whether you have cats, dogs or horses, you may have specific wishes regarding their care if something were to happen to you. You have a number of options available to make sure that your animals are taken care of and protected.
How often should I review and/or update my documents?
If any of the following events occur, you should review the potential effect on your estate planning to determine whether your will should be amended by codicil or revised in its entirety. (This is not an all-inclusive list.)
Can I create a Will online or with software?
While this alternative may seem to be “better than nothing”, it is still a risk not to seek the counsel of a professional. Where on-line forms and will kits can address your concerns in a general way, a good attorney can make recommendations based on your family’s specific circumstances.
You have many options available to you that you will not know about or understand unless you have a competent attorney to advise you and explain such options. Detailed and specialized planning cannot be accomplished through online forms or will kits, nor can it be accomplished by filling out a form and sending it in to be prepared, even if it is being prepared by attorneys.
There are a number of questions that your attorney can guide you through, such as:
When you find out that your online form or do-it-yourself will kit was insufficient, it will be too late and your family and loved ones may be in the same position as if you had done nothing at all. The cost of doing no planning or not doing it correctly far outweighs the cost of the peace of mind you receive by careful and thoughtful planning.
I have a Will from another state that was written before I moved to Texas. Should I get a new Will now that I live here?
Yes, it is best for you to prepare a Texas-specific Will. Texas does recognize Wills executed in other States, however, it will be easier for your executor to go through the probate process if your Will has language specific to Texas.
For instance, Texas allows for what is called an “independent administration” that allows an executor to carry out the wishes in your will essentially free of court interference. The only actions taken in court in an independent administration is the probate hearing, whereby the executor is appointed pursuant to the Will, and the final filing of an inventory of the estate. If language requesting an independent administration is not in a Will, then the default is for the court to supervise the entire probate process, which can be very costly and time-consuming.
Some Other Considerations
What other documents should I be thinking about?
How do I get started with creating my Will and other documents?
We have a simple 3 step process for creating your Will and other documents. You can find more information here.
What do I do now that I have gone to a lawyer and have all my documents finalized?
Here is a link to the closing letter I give to all of my clients once they’ve completed their documents:
What areas do you service?
We provide legal services to areas throughout Texas. Many, but not all, of our clients are in these DFW (Dallas-Fort Worth) cities:
and zip codes:
If you don't see your city or zip code listed here but you live in Texas then don't worry - the Law Office of Lorie L. Burch can help you!