Most Texas residents have heard that it's important to have an estate plan. For those who are not aware of what estate planning is, it's the act of coordinating how personal and financial matters are dealt with in case of death or incapacity. One of the most common estate planning documents is a will, but only having that document could prove to be a costly mistake for Texas families.
When someone creates a will, it's a set of instructions on how a grantor wishes for their assets to be distributed upon death. It's important to have a will among documents since the state may decide how to distribute those assets without one. Many people make the mistake of having this as the only document in their estate plan, while there are others to be included, such as a medical power of attorney and financial power of attorney. A medical power of attorney allows grantors to choose someone to act as their health care agent just in case they're unable to make their own health care decisions.
With a financial power of attorney, a grantor gives someone permission to make financial decisions on their behalf and manage finances in case they're unable to do so. Most people attempt to save money by creating their own estate documents online, which could be a costly mistake in the long run. Professionals who have expertise in this field are able to assist in proper preparation of estate planning documents.
Proper estate planning could help to decrease or eliminate estate taxes. In addition, surviving Texas family members of an estate may be able to avoid expensive probate litigation. It is recommended that grantors review their documents and make changes as needed every few years. Significant life changes may include divorce or the birth of a child.
Source: Fox Business, "The Biggest Estate Planning Mistakes You Can Make", Kelly Trageser, April 7, 2014