It is important to have a will that reflects your current family situation. Dying without a will, or with an outdated will, risks that your property will not be inherited as you wish. In the absence of a current will, the courts will distribute your property according to a strict statutory scheme that leaves no room for individual modification. For example, if a person dies without a will in Texas and is survived by a spouse and children, the surviving spouse receives only his or her one-half share of the community property, perhaps even including the family home. This is not what most married people intend. Moreover, dying without a will can tie up your assets in court for an undetermined amount of time and cause your heirs to incur substantial expense transferring ownership of assets. A current will avoids most of these problems and allows you to leave property to whomever you desire.
What Is A Will?
A Will is a legal document by which you may direct the distribution of your property upon death in an economical and efficient manner. Bequests under a Will may pass either outright to a beneficiary or in trust for a beneficiary.
What Is A Trust?
A Trust is a legal entity in which legal title and management of property are vested in a trustee who administers the property for the beneficiary.
Why Should You Have A Will Or A Trust?
If you die without a Will, you will have no choice as to how your property will be distributed. Upon your death the rules of intestate distribution will be substituted for your wishes. Furthermore, your estate may be frozen or encumbered with legal expenses and delays during the probate process if you do not have a Will.
There are many tax and non-tax reasons for creating a Trust in your Will (Testamentary Trust). For example, a person with a substantial estate may wish to consider leaving a large portion of the estate in trust for the beneficiary to prevent the taxation of such property upon death of the beneficiary. Additionally, if a minor child is a beneficiary of the estate, it is advisable to create a Testamentary Trust for the benefit of the child until the child attains the age of majority or any other appropriate age.
What Is Probate?
Probate is the process of submitting your Will to the Probate Court, administering your estate, and distributing your property.
What Is Estate Planning?
Estate Planning is the process of ascertaining which legal vehicle, i.e. Will or Trust, and what pertinent provisions to insert in your Will or Trust that will provide the most tax efficient means to manage and pass your property to your heirs upon your death. In the course of assembling the various requested information, you should decide, in a general manner, the way in which you desire your estate to be distributed. Naturally, there are may factors that need to be considered when arriving at a comprehensive estate plan, such as Federal Estate and Income Tax consequences, and these will differ with each situation.
If you have questions about Wills, trusts, probate or estate planning, contact us at Warmbrodt & Associates and we would be happy to assist you in all your estate planning needs to ensure your wishes are honored and your heirs do not spend any more money than is necessary carrying out your wishes.
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