Some people in Texas might think they do not need an estate plan because they do not have children. They may have no close relatives or might only have a spouse. However, there are a number of reasons to have an estate plan even if a person plans for all assets to go to a spouse.
When Texas couples decide to end their marriage, it can have a significant effect on their estate planning decisions. Many people across the country hurried to finalize their divorces in 2018, due to new tax law changes going into effect in 2019. Now that the marriage is over, however, there are a number of other procedures for people to look into to ensure that loose ends have been tied. When people marry, they often include their spouses as the primary beneficiary of wills, trusts and other estate planning documents. Divorce can inspire thorough changes in these documents, and the divorce decree can be a good place to start.
Single residents in Texas may have to adjust how they handle their estate-tax planning due to the changes in the tax law brought on by the Tax Cuts and Jobs Act. Under the TCJA, the unified federal gift and estate tax exemption was raised to $11.18 million for the 2018 tax year and $11.4 million for the 2019 tax year. There will also be adjustments for annual inflation from 2020 to 2025.
There are several reasons a person in Texas may need an estate plan regardless of whether the person is wealthy or not. However, people may hesitate to make one. One survey found that only 42 percent of people said they had an estate plan.
It's not unusual for hardworking individuals in Texas to do everything possible to protect the future of their assets. This is often done legally with either a will or trust. However, many estate owners neglect to do this. For example, the late R&B singer Aretha Franklin never made such arrangements with her own estate, estimated to be valued at approximately $80 million. Because of a lack of will or trust, the Queen of Soul's four sons have come forward as interested parties. Franklin's niece has reportedly been selected to act as the estate's personal representative.
Having a carefully crafted will is important, but this only a small part of ensuring that assets will be managed in accordance with one's wishes. A well-developed estate plan is necessary to address the complicated issues that can arise regarding a decedent's estate. With an estate plan, a Texas resident can specify what should happen to their estate after they die, their reasons for wanting their estate handled in a specific way and who should be in charge of the estate to ensure that it is managed properly.
When people in Texas decide to divorce, they are often aware of the range of financial, practical and emotional changes and decisions that lie ahead. While divorcing spouses are often prepared for these challenges, there are some issues that can be very important yet are rarely considered at the time of a divorce filing. One such issue is estate planning; during a marriage, many people develop an estate plan jointly with their spouses. After the marriage has come to an end, it is time to change those plans.
Failing to plan for the future can have costly and dangerous impacts on people in Texas, especially seniors over 65 who do not have a will or other key estate planning documents. One Wells Fargo survey found that around 40 percent of Americans in this age group do not have critical documents in place that can protect them if they are incapacitated and can make sure their wishes are followed upon their death. Without these plans in place, people can be more vulnerable to financial abuse and exploitation, a major concern for elderly Americans.
For people in Texas concerned about providing for their loved ones and preparing for the future, estate planning is a must. This process involves the creation of certain documents, like wills, trusts and powers of attorney, in order to arrange for how a person's assets will be handled through their life and after death. It can also address key concerns like how decisions will be made on key matters like healthcare or finances in case a person is incapacitated. While many people recognize just how important it can be to draw up an estate plan, 55 percent of Americans do not have the most basic document: a will.
A trust can be a powerful tool as part of a Texas resident's estate plan. Assets such as annuities or life insurance policies can be placed in a trust so they can increase in value while tax deferred or tax free. A person can also place conditions on distributions such as having them go to a beneficiary over a period of time or after reaching certain milestones. The grantor may have a goal for the trust, such as providing for the education of grandchildren, that can be written into the document.