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Try a step-by-step process for taking estate planning action

It may help some people to get through the mental block of preparing an estate plan by thinking and approaching the process as a step-by-step procedure. Doing one thing at a time may be more emotionally satisfying and feasible than trying to tackle the whole project in one fell swoop. The estate planning process in Texas is generally similar to what would apply in the rest of the country.

The first thing that people think of is to make a simple will. For a husband and wife, this would entail generally the making of reciprocal wills leaving everything to each other and then to designated beneficiaries in the event that both spouses are deceased. Another important initial task is to buy life insurance. This basic protection is important due to the unfortunate fact that we cannot predict when and where an unexpected tragedy might strike.

With respect to life insurance and investments, it may be advisable to use the services of a financial planner so that all of the bases will be covered and protections will be provided. The next consideration may be to draw up a living trust. This will be beneficial under certain circumstances, but it should not be tried without the guidance of one's estate planning attorney. The big benefit of this tool is that the trust proceeds will not have to go through probate, the process will remain private and it will avoid costs and potential taxes.

It is always critical to go back and check your beneficiary designations on life insurance policies, retirement and investment accounts. These all may use a beneficiary designation for passing on the proceeds upon the owner's death. In fact, the beneficiary designation can trump anything to the contrary in the will.

Making final arrangements and setting up a "payable-on-death" account for funeral and burial costs could be an estate planning benefit under Texas law, depending on one's preferences. It is advisable to draw up a letter of instructions for the personal representative to have all the details. This document can save the estate a lot of guesswork about the location of accounts, preferences and procedures to follow.

Source: ahwatukee.com, "Financial Focus: Step-by-step approach can ease estate-planning process", Joseph B. Ortiz, June 7, 2015

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