A Will or Trust is a legal document which provides for the unique needs of your loved ones. A Will or Trust allows you to leave property to the beneficiaries you desire. In addition, your Will may designate the individuals who will care for minor children. You may also set up a Trust for your children. The Trust provisions are included in the Will and state the reasons for which your children may receive distributions, such as for education and health care. A well-drafted Will or Trust by estate planning attorneys like Badeaux & Associates should avoid many of the costs and delays that may arise from dying without a Will.
No. After a person dies, their assets belong to their “estate,” not yet to the heirs or beneficiaries. Even though the heirs have possession of the assets, they do not have “marketable” title to the deceased person’s assets. Marketable title is achieved in probate. The Executor has no official power until the court has admitted the Will to probate and the Executor has taken an Oath. After appointment, the Executor can legally transfer title to the beneficiaries, which gives them marketable title.
For example, institutions like banks, stockbrokers, and title companies generally require Letters Testamentary from the Executor named in a Will before those institutions will release large sums of money to beneficiaries or allow the sale of real estate.
If a person dies without a will (or “intestate”), the heirs must be determined in Texas probate court proceedings called Dependent Administration and Heirship Determination. Legal fees for these proceedings can easily double the fees for probate if the decedent had died with a valid Will.
During those Heirship Proceedings, if the deceased person had one marriage, the surviving spouse usually receives 100% of the decedent’s assets. If the decedent has no spouse at death, the estate usually goes to the children. However, if the deceased person was in a second marriage, the law gives the decedent’s children by the first marriage 1/2, 1/3 and 2/3 of all assets, depending on whether the assets are real estate or personal property, and community or separate property. The second spouse receives 1/2, 2/3 or 1/3 of the assets.
If you hire the estate planning attorneys at Badeaux & Associates to draft your Last Will and Testament, your heirs will avoid the unnecessary court costs, complicated proceedings and delays.
Maybe, but internet fill-in-the-blank Wills almost always cause delay and extra costs after you die, the time when your heirs are least equipped for either. A valid Will in Texas has many requisites that need to be carried out. Formalities such as proper witnesses, proper execution formalities and proper intent have to be followed. Only an attorney can legally draft a Will for a person, unless a person drafts his own Will. Internet Will templates are often incomplete. If your internet Will fails to follow state law, it could be invalid. An invalid Will can create a lot of controversy.
You might think that an internet Will seems like an inexpensive and safe option. However, using the internet can end up having thousands of dollars of assets not given to the people you desired. The security you get from do it yourself Wills and Trusts is false and misleading. Accidently, choosing the wrong wording in your Will or Trust can end up leaving your beneficiaries fewer assets than you wanted. For example, many families have come to us with poorly drafted Wills, which end up costing everyone far more than the cost of a correctly drafted Will or Trust.
We advise you to choose experienced Texas estate planning attorneys for drafting your Will or Trust. Using the uncertain internet options can leave you and your loved ones in worse off positions. With 45+ years of combined experience, Badeaux & Associates can draft a Will or Trust that will leave you and your loved ones with peace of mind.
Absolutely, a Will or Trust can be modified at any time, but is generally only changed due to changes in life events such as a change in beneficiaries, change in children's status, Executor status, or change in your marital status. Changes can be accomplished with a document called a codicil, or by revoking the Will or Trust and having a new one drafted. Codicils must be executed with the same formalities of a Will, i.e. two witnesses and a notary.
The most common type of Trust Badeaux & Associates recommends is a Testamentary Trust meaning a Trust in your Will, usually for your children. Trusts in Wills are excellent vehicles for minor children, and adult children as well. You are the “grantor” and your “beneficiaries” are the persons who receive the assets upon your death, whoever you choose. The “trustee” is the person who manages the Trust assets. The trustee and beneficiary can be the same person.
Testamentary Trusts are also used to save estate taxes and are commonly called “Credit Shelter Trusts,” “Bypass Trusts,” or “A/B Trusts.”
Revocable Living Trusts are another type of Trust. They are especially helpful for people who may have long term dementia, like Alzheimers, and for people with real estate in multiple states.
An advantage of your beneficiaries such as adult children receiving your assets in trust is that their assets are protected from their creditors. “Creditors” includes divorcing spouses, as well as creditors who receive judgments in lawsuits against any of your beneficiaries. Your beneficiaries can be their own trustees.
Living Trusts are similar to a Last Will and Testament in that they dispose of assets after death. The Living Trust has the added advantage of allowing you to name a trustee to manage your assets for an extended period of time if you become incapacitated after executing the Living Trust. Living Trusts can avoid probate in multiple states if you own real estate in multiple states; however, an easier way to avoid probate in multiple states is to form a limited liability company to hold your out-of-state real estate.
Disadvantages and misunderstandings of Living Trusts are so serious that the State Bar of Texas posted a section about Living Trust abuse on its website. Living Trusts are more complicated than a Will, they do not avoid estate taxes, they do not provide creditor protection, you still need a Will, and you must transfer all of your assets into the Living Trust during your life in order to avoid probate.
To learn more, speak with our estate planning lawyers based in Clear Lake today. Call us at 281-486-4737 or contact us online.