Livens & Reed, PLLC

Dallas Estate Planning Law Blog

Estate planning is about more than asset distribution

Most people in Texas are aware of the importance of creating a plan for the future. Many people have the misconception that estate planning is only for the time following their death and will determine how their assets will be distributed. However, a comprehensive estate plan also focuses on a time when someone is unable to make financial and medical decisions on their own due to an illness or injury.

For example, an older woman in another state reportedly had a stroke while exercising. While her son had created bank accounts for the woman after her husband died, he and his siblings discovered that because no other names were added to the account and no powers of attorney created, her children did not have access to her health care directives or her bank accounts. While the woman recovered, the situation created turmoil that may cause lasting damage to the family relationships.

Determining how much of an inheritance to leave

There are some parents in Texas who work their entire lives with the plan of leaving whatever assets remain at the time of their death to their children. There are others, however, who worry about how leaving their children with a large inheritance will ultimately impact them. While most people in the United States inherit $50,000 or less, there are a significant number of people left determining how up to $25 million or more will be distributed.

While it may seem contrary to what many parents think, there are those who worry that leaving their children a large amount of money will have a negative impact. One specific concern is that their children will inherit at a time in their lives when they are set to forge their identity. Other concerns are related to the ideal that receiving a large inheritance will remove any motivation that they might have to work.

Debunking myths surrounding estate planning

If asked, most people would state that they recognize the importance of planning for the future. For many, this would include the estate planning process. Unfortunately, there are many misconceptions regarding the process that could skew how people in Texas and across the country view it.

First, many people believe that the creation of an estate plan is essentially planning for death. While a plan will provide instructions regarding the distribution of assets upon a person's death, it also plans for an unexpected illness or injury that could result in incapacitation. Signing a power of attorney ensures that there is someone who can immediately step in a make financial and/or medical decisions should incapacitation occur.

Should children receive an equal inheritance?

Most parents in Texas work hard to ensure that none of their children feel as if their siblings are favored in some sort of way. While ensuring that each child has the same opportunities in their life is understandable, there are often extenuating circumstances that could lead a parent to leave one child a larger inheritance than others. Parents who may be considering doing so may be unsure of the best way to do so.

When determining how an estate will be divided, there are several different reasons why a parent may choose to leave one child more than the other. For example, one child may be financially stable due to a high-paying job while the other may be less so. Perhaps one of the children is the primary caregiver for the aging parent, ensuring that the parent is taken care of and arrives at doctors' appointments.

Asset protection and elder financial abuse

People today are living longer than ever, which is wonderful, but also means that they need their savings to stretch further than before. While many seniors feel comfortable with their finances, there are those who want to take advantage of them and will go to great lengths to steal seniors' money, even when they are related to the victim. Worse still is that around a third of seniors don't know how to report the abuse, even when they recognize it. Experts say there are ways for financial advisors and others to pick up on potential elder financial abuse. Asset protection is vital for seniors in Texas and across the country who want to be certain that their assets last them through the end of their life.

Initially, a senior should delegate certain responsibilities to chosen people. First, a durable power of attorney is a person who can handle the senior's finances if he or she is unable to for any reason. The senior can also create a revocable trust and assign a co-trustee to ensure that it is used properly. Though this is generally a step for those who have high assets, it's still a great step to consider. Another designation to make are multiple trusted contacts, who can all serve as a check and balance for one another to ensure that the original estate owner's wishes are being honored.

What to include in a Texas estate plan

When it comes to planning for the future, most people in Texas recognize the importance of estate planning. Despite this recognition, some people may find the task daunting. In fact, some people are even unsure what documents are important to include in an estate plan.

Perhaps the most important document -- and the one with which most people are familiar -- is the will. This documents serves a variety of different functions, including determining how assets will be divided upon the testator's death. However, beneficiaries listed on a retirement fund, for example, take precedence over the will so it is necessary to update beneficiaries if something changes. Additionally, many people choose to create a trust; assets that are in a trust do not have to go through the probate process. 

Gift giving as part of estate planning

When people in Texas plan for a future in which they may no longer be present, they often have multiple decisions to make. Ultimately, the decisions that they make could impact how much of their estate their loved ones will have to enjoy. Because most everyone wants to ensure that the maximum amount of their estate goes to the intended recipient, those making such plans often consider whether gift giving in advance of their death is a necessary part of estate planning.

In the past, many people considered gift giving in an attempt to reduce the amount of taxes paid on the estate. However, this isn't necessary for the vast majority of people in the United States. Currently, $11.4 million is exempted from federal estate tax -- an amount that increases each year to account for inflation; as a result, only a very small number of estates are subject to federal taxes. Though the amount is set to fall to $6 million in 2026 if legislative action is not taken, only approximately 0.2% of people would be impacted if that were to happen.

Choosing the most appropriate trustee for an estate

There are a variety of different decisions that go into the process of how assets will be divided. Many of these include how assets will be divided and how they will be treated. Perhaps one of the most important decisions that must be made involves who will be managing a Texas estate in addition to how it will be divided. 

For many people, the most obvious answer is one of their adult children. However, this could potentially cause conflict among other children. While some people have chosen to name all of their children as their co-trustees, this can also create conflict if the children have differing ideas about the estate's administration. Few siblings, for example, have experienced years of legal maneuvering when they were named as co-trustees.

Does a childless couple need a will?

Many people in Texas have a certain idea of what a family looks like. However, the reality is that families come in all shapes and sizes. For example, many couples, for a variety of different reasons, do not have children. Because there is a misconception that a will is only necessary to ensure that children are provided for in the event their parents are no longer able to provide such care, many childless couples may not fully understand the implications of a lack of an estate plan.

Regardless of whether there are children involved, a will can help determine how a person's assets are divided. Those without children often want their friends, favorite charities or alma mater to benefit. Without a will in place, however, the state in which the couple lives will make a determination regarding the division of assets.

Including pets as part of the estate planning process

Families in Texas and across the country can have a variety of different compositions. In fact, some families may count more than humans as members of their family. For many, the family pet is a member of the family whose owners want to ensure is protected even when they are not around to do so. Fortunately, there are measures that can be taken in the estate planning process that can help ensure this.

It is often beneficial to have a conversation with friends or family members to help determine who would be willing to take care of the pet in case the person becomes incapacitated or passes away unexpectedly. Unfortunately, animal shelters are accustomed to receiving pets from owners who can no longer provide appropriate care. Fortunately, there are steps that can help ensure an animal receives appropriate care.


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