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Many
clients will choose a Last Will and Testament (“Will”) as the
foundation of their estate plans. A person who dies with a
Will or other dispositive document is referred to as dying
“testate” or, if they should die without a Will,
it is said they died “intestate” (no Will).
If a person dies with a Will they have the opportunity to
control who, how and how much their beneficiaries receive
A Will
is the Testator’s opportunity to control the disposition of his
or her assets at the time of his or her death. It is a document
which must meet strict criteria in order to be “probated” by the
court at the time of the Testator’s death. The advantages of a
Will include
- Ability to select your executor
- Transfer your assets according to your plan vs. the
“State of Texas” plan
- Designate a guardian for your minor children
- Make charitable gifts
- Protect your pets
- Minimizes your estate tax burden
- Disinherit a family member
- Control when your children receive your estate (instead
of all at once possibly as young as age 18)
- Protects property in the case of the “blended” family
- Allows lesbian and gay couples to protect their life
partner
- Protect your estate from “creditors and predators”
Many clients will choose a Revocable Living Trust
("RLT") instead of a Will as the foundation of their
estate plans. Properly drafted, a RLT offers complete asset
control to clients during their lifetime; avoids multiple
probates if the client has several residences or inherited
property in another state or states; provides for incapacity
planning during the client and his or her spouses lifetime and
after death; and on death allows them to pass their assets to
their loved ones without the costs, delays, and the public
record associated with probate.
Can I protect my spouse and children's inheritance from
"creditors and predators"?
With proper planning. We often incorporate irrevocable trust
planning to provide protection for the surviving spouse by
holding a portion of the estate in a trust which pays income and
principal to the surviving spouse but retains creditor
protection and protection of your family from remarriage.
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Also, instead of leaving your assets equally to your
spouse or your children outright, why not leave it to
your children in "Dynasty Trusts" – lifetime irrevocable
inheritance trusts. These trusts, if properly drafted,
can protect your child's inheritance from a spouse in
the event of divorce; protect your child's inheritance
from creditors in the event of a financial hardship; and
upon your child's death, the unused assets can be
protected for your grandchildren.
How often should I review my Estate Plan?
The only constant in life is change. So as your assets and
family matures, your estate plan may need to adjust to those
changed circumstances. It is important to maintain your estate
plan to ensure it is keeping up with the changes going on in
your life and the complex changing laws and tax consequences.
These are just a major life events that would necessitate a plan
review:
- Birth or death of a family member or potential
beneficiary
- Divorce - whether it's yours or someone identified in
your estate plan
- Change in your distribution plan; or your named agents,
executors or trustees
- Change in your financial circumstances
- Change in your property ownership
- A desire to change one of your named "fiduciaries" or
alternate fiduciaries (e.g., executor, successor trustee,
financial power of attorney; health care agent, etc.) in
your legal documents.
You should initiate a review under any of these
circumstances. And even if none of these circumstances have
changed, it is a good idea to review your plan with your estate
planning attorney every 2-5 years.
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