Estate planning is a maze best traveled with professional help

by | Jul 11, 2016 | Estate Planning |

An estate plan under Texas law is a way of designating how one’s assets may be distributed at death. Estate planning also takes into account uses of those assets during life and provides for a smooth transition if the owner of the assets becomes incapacitated and unable to take care of his or her own financial affairs while still alive. One of the most important considerations of an estate plan is that it gives the individual the power to direct the disposition of his or her assets as the person desires and not as state law would dictate it.

Estate planning can even provide funding that begins in the benefactor’s lifetime, in the form of a living trust. The trust provisions may direct the use of the funds until the donor’s death, at which time it will be distributed according to the trust terms. An individual can also set up a testamentary trust in his or her will. This trust does not begin until the testator dies.

The testamentary trust is funded by the assets owned in the testator’s name alone at the time of death. Whereas in a living trust, the donor himself may serve as the trustee, in the testamentary trust the trustee is appointed by the terms of the will. It is important to keep in mind while conceptualizing these principles that there are certain assets that will pass at the individual’s death automatically by operation of law.

One major type of property that passes by operation of law in Texas and elsewhere is the asset or account that is owned with a spouse or other person as joint tenants with the right of survivorship. Title passes automatically to the surviving joint tenant at the other’s death. That mechanism supersedes anything to the contrary in the will.  In addition, life insurance proceeds, investment and retirement accounts all generally pass directly to a listed beneficiary and not by will. With all of these exceptions and refinements of law, it is recommended that one set up a comprehensive and coordinated estate plan with the help of an experienced estate planning attorney.

Source:, “Cutter Family Finances: The Final Plan — Thinking About The Unthinkable“, Susan Roman, June 30, 2016


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