Making verbal promises for asset transfers do not hold up once a person is deceased. Failure to do proper estate planning can result in the state of Texas stepping in to choose how assets will be distributed. Any person can create an estate plan regardless of how much or how little he or she has.
One of the most general and important documents to include in an estate plan is a will. A will is a set of instructions on how an individual wishes to have his or her affairs handled once he or she is deceased. Wills do not just address the matter of assets, they also address matters involving children. It is recommended that parents designate a guardian, just in case both parents become deceased.
Another document included in an estate plan is a trust. There are two categories for trusts, which are revocable and irrevocable. With a revocable trust, the grantor creates this while he or she is still living and can make any necessary changes or cancel at any time. With an irrevocable trust, it can be drafted while still alive or even through a will, but it cannot be modified later. Irrevocable trusts have some advantages such as creditor protection and transfer tax.
Estate planning may be vital for those who wish to have their assets distributed to intended persons. Without an estate plan, there is a good chance the government may get involved and decide how the assets are distributed and to whom. The most common documents found in many estate plans are wills and trusts, which can reduce the amount of confusion and courtroom headaches. It may be beneficial for Texas individuals to become familiar with estate laws and procedures.
Source: cnbc.com, Estate planning points way to will, trust and health proxy preparation, No author, March. 2, 2014
