WILLS, TRUSTS & ESTATE PLANNING in Texas

Why Having a Will is Important in Texas
A Will is an Act of Compassion and Responsibility.

By the Estate Planning Attorneys at Smith & Garg, LLC, serving The Woodlands, Spring, Houston, Conroe, Humble, Kingwood, Tomball, Cypress, Huntsville, Westchase, Southwest, Sugar Land, West Oaks, Alief, Memorial, River Oaks, Stafford, Katy, and Missouri City.

Nobody likes to think about death, yet alone preparing a Will. However, it is necessary to draft a Will, and keep it up to date to ensure that your family and loved ones are taken care of after you die. Remember, a Will is an act of compassion and an act of responsibility. If you die without a Will, the courts will decide how your estate should be distributed, which may not be in the best interests of your family and loved ones.

The Texas Probate Code has provisions detailing how to distribute an estate that involves intestate succession (dieing without Will). The following article outlines some of the reasons why having a Will is important.

Your Estate May Not Pass to the Right People

First and foremost, the most important thing to consider is that your estate may not pass to the right people, if you die without a Will. Intestacy laws in Texas ensure that your spouse, your children and perhaps some of your grandchildren will share in parts of your estate. For the most part, this is a good thing. But, what if you have a child that you have severed ties with? Or, what if a person claims to be your child after you die; that person could potentially share in your estate. Or, what if you have no children and your parents survive you; your spouse may have to share your assets with his/her in-laws.

Your Children Too Young to Manage Distributions

Another situation to consider is if you have children that are young adults, distributions can be used unwisely. Under the Texas intestacy laws, once the child reaches 18 years of age, they may use their funds in whatever manner they choose. If you have a Will, you can establish a trust fund that can plan for distribution of money to your children to ensure their security. By arranging a trust, you can not only protect your children, but you can prevent your children from making unsound financial decisions. Additionally, such a trust can provide a distribution scheme that would prevent a child's share of your assets passing to their ex-spouse or to a creditor.

Distributions to Your Children Can Be Inequitable

Suppose you die intestate, and have two children that survive you, but no spouse. Under the intestacy laws, those two children will receive an equal distribution of your estate. However, what if you have a handicapped son who cannot care for himself properly, and a daughter who is an attorney and married. Or, what if your oldest child is 35 and a physician, and the other child is 18 and has just begun college? Obviously in these situations, the inevitable equal distributions do not appear to be an equitable result. Only a Will can provide for these special needs and circumstances. Remember, you are always the best administrator of your estate.

Guardian Will Be Appointed for Minor Children

If you die intestate, and you leave minor children behind, you should be aware of the fact that the court will appoint a guardian of your minor children, without any input or guidance by you. If you have a Will, you can make a recommendation as to who should be appointed guardian of your minor children, which serves as a "strong guide" to the court in making this decision. Additionally, you may recommend in your Will that the guardian not be required to post bond.

Continual Court Involvement in Family Finances

Without a Will, you are deprived of appointing specific powers on your Trustee or Executor, in addition to those that are granted by statute. For example, with a Will, you may mention that you would like the Executor or Trustee to serve as a fiduciary without having to post a bond. Also, you may want to include something in your Will directing your Executor or Trustee to take certain actions, such as selling real estate, without having to go to court. However, in the absence of the Will, the Executor or Trustee would not be able to take any action without a court proceeding.

Administrator May Collect Estate Taxes from Your Beneficiaries

In most cases, a Will specifies which portion of the estate should bear the burden of estate taxes and then further allows the Executor to gather assets to pay off those taxes. Most of the time, a Will provides that the residue of the estate bears this tax burden. What this means is that the taxes are paid out of the residue first before distributions to the residuary takers are made. In the absence of a Will, taxes can be allocated proportionately to the assets inherited. Life insurance and retirement benefits are still part of your estate and, thus, can generate estate taxes. As a result, the administrator of your estate may be forced to collect funds from the beneficiaries of such assets to satisfy estate taxes.

Risks of Having an Out-of-Date Will

Remember, having an out-of-date Will is almost the equivalent of not having one at all. An out-of-date Will may distribute assets to people you would not intentionally select, such as former spouses or distant relatives. Also, you may be designating a guardian for your minor children, whom you no longer want due to a change of heart. Further, you may end up leaving significant assets to people you no longer intend to be beneficiaries or to the heirs of deceased beneficiaries. It is important to update your Will whenever your family situation changes. State and federal laws that affect estate planning may also change from time to time, so you should have your Will reviewed regularly by an experienced attorney.

If you have not drafted a Will yet, it’s not too late. Call Smith & Garg LLC at 281-210-0010 to prepare your Will today or use our Contact Form.