Life insurance often plays a major role in estate planning, both in Texas and nationwide. The insured individual should maximize the estate planning value of his or her life insurance by making sure that all considerations are covered and effectively applied. One goal of this process is to free the insurance proceeds as much as possible from the grasp of the IRS and to put those proceeds into the hands of one's beneficiaries.
When a Texas resident is concerned with planning for the future -- specifically, planning for the financial security and well-being of loved ones after his or her death -- complex situations may arise that necessitate legal help. Estate planning can be a simple or very complex process, depending on the circumstances of an individual case. If you are uncertain as to the best way to proceed in documenting your desires and needs with regard to an estate plan, it might prove beneficial to seek legal counsel in the matter.
The most popular trust is called a living trust. A person called the grantor, trustor or creator transfers assets to a trust that will be administered on behalf of a designated beneficiary by an appointed trustee. A living trust is a major legal instrument that is used in estate planning here in Texas and elsewhere to distribute assets of the grantor to trust beneficiaries, thus getting them out of the control and ownership of the grantor during his or her own lifetime.
It is a common misconception among residents here in Texas and across the country that estate planning is only for couples and older individuals. While these people need solid estate plans, singles can greatly benefit as well. The only dissimilarity is that the estate planning process itself and the documents that need to be created are different.
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.
Estate planning in Texas includes making sure that all insurance, investment and retirement proceeds have the proper beneficiary designation. An outdated set of beneficiaries on such accounts could cause a post-death disaster for one's loved ones. They may be left without valuable resources because the owner of the accounts ignored basic estate planning concepts and procedures.
Many people focus on their retirement funding, but they don't go the next step and see to it that there is an estate plan to take care of other vital necessities. Whether one resides in Texas or elsewhere, estate planning should be considered an integral part of retirement planning. The two plans should also be conjoined with long-term care planning, also called elder law planning.
When constructing a comprehensive estate plan, many Texas couples are unsure whether or not they should discuss the details of those plans with their adult children. There are various reasons for avoiding the subject, not the least of which is a desire to avoid contention within the family if the children will not inherit equal shares of the family's estate. However, this is also the primary reason why parents should discuss the content of their wills with their children, so that any familial strife can be worked through before a death in the family increases the level of tension and stress.
Estate planning in Texas and all other states includes determining how much you can give away in gifts at your death and how much you can gift during life without incurring federal tax consequences. For estate planning purposes, the federal estate tax now exempts $5.43 million in bequests that a person can give to others upon his or her death. For a married couple, it is the total of each spouse's $5.43 million that is ultimately available. One spouse can bequest his or her unused portion of the exemption to the surviving spouse.
If having your assets pass to your beneficiaries in a smooth and inexpensive procedure is important to you, then estate planning should be conducted now while you are healthy and fully competent to sign the documents. In some cases, probate can be avoided by estate planning that sets up living trusts. The owner turns over and transfers title of designated assets to the living trust, to be administered by the trustee. In Texas and other states, living trusts become the recipients of some or all your assets during your own lifetime.