Wills and Estate Planning 101

Posted by Cindy R.

June 1, 2009

by Cindy R.

No matter how much money you have it is important to have a basic estate plan to protect your family and your assets after your death. An estate plan can be as simple as a last will and testament to extremely detailed to contain a power of attorney, a living will and even a trust. We’ll cover each of these tools in order.

The first and often the most important instrument to put in place is your last will and testament. A will is a legal document that outlines your wishes regarding your assets after you die. Many people make their own wills through software or forms they download off of the internet but this isn’t always a wise choice. Requirements for wills are different from state to state and are not always easy to interpret. If you don’t create a will that can be validated in probate court then your estate may be disposed of as if you never even wrote a will. The bottom line is that hiring a professional to help craft your last will and testament is a smart choice and it can be done for a reasonable fee.

Next in the process comes the durable power of attorney. A power of attorney allows another person to make decisions on your behalf and a durable power of attorney is a special kind that allows the decisions making authority to continue if you become incapacitates and unable to make decisions for yourself. This is particularly helpful when it comes to making medical decisions and there are specific versions call a health care power of attorney for this purpose.

Living Will - A living will is an advanced directive that spells out your wishes to caregivers if you become unable to communicate them due to incapacity. It can be very specific to certain situations such as not wanting to maintain life support if a physician determines that your situation is terminal. A living will is usually created in conjunction with a Health Care Power of Attorney.

Trusts are another mechanism that will allow you to disperse your property while placing restrictions or requirements on the property. Trusts aren’t just for the wealthy. If you have dependent children that you with to leave money to, you can have it held in trust until they reach an age of your choosing. Trusts can also be an effective means to minimize taxes associated with your estate.

There are also significant ways to manage taxes at your time of death. Some of the many tools available to do this include a wide array of trusts (life insurance, remainder, personal residence, etc) and life insurance policies that pay directly to the beneficiary upon death. These vehicles are at the more complicated end of the estate planning spectrum.

Now that you are familiar with some of the estate planning tools it is time to start the process. Whether you go it alone or enlist the help of a professional the first step is to create a list of all of your assets. Once you have your list of assets you will need to make a decision about what you’d like to happen to each asset upon your death. Should it go to family, your alma matter, your favorite charity or someplace else that is near and dear to you?

Setting up a Will in Texas can seem like a complicated process but take it one step at a time and you will quickly gain the peace of mind know that you and your loved ones will be taken care of if you should pass away. Enlisting the aid of a professional estate attorney will help you land with the exact types of documents that will most help you and your particular needs.

About the Author:

Cindy writes articles about estate planning topics like Texas Living Wills and how to Write A Will at TexasWills.com.

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Wills and Estate Planning 101

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