Estate Planning Myths

There are many mistaken beliefs by the mythspopulace when it comes to wills, trusts and probate.  I hear some of them when I meet with clients.  But more often I hear these particular myths when speaking with people who don’t know what I do for a living.  So here are a few of the gems I hear.

I have a Will. That’s all I need.

Usually this statement is made by someone who got their will online, which creates its own problems.  But if we assume that it is a valid will in Texas, it should cover the basics when the person dies.  But many people become incapacitated and unable to care for themselves for a few weeks to many years before they die.  A complete estate planning package should include financial and medical powers of attorney and a living will that gives your loved ones authority to act and direction in the event of catastrophe.

We made our wills when we got married.   It’s still effective, right?

Well, how long ago did you get married?  Have you had children?  Are your executor and trustee still the people you wish to serve in that capacity?  Have estate laws changed since then?  These are just a few of the things that can change over time.  Everyone with a will should at least review it on their own to be sure it still makes sense to them.  But meeting with your estate planning attorney about any law changes or changes in your family situation is also a great idea.

I’m too young to start thinking about a Will.

Life is unpredictable and uncertain. Anyone of us could be hit by a car or suffer a debilitating or fatal health issue at any time.  Take some time to create a Will and other important estate planning documents in order to ease the burden on your family.

I don’t need a lawyer to create a Will.

While this is technically true, it is dangerous.  There are so many pitfalls in prepareing a will without consulting an attorney.  And those pitfalls are likely to reveal themselves only after you have died.  At that point it may be impossible or very difficult and expensive to remedy the error or omission.  That is why I don’t recommend trying to prepare your estate planning documents on your own. There are many variables and unique situations that play into an individual’s estate plan, and a generic document may not cover those.

My family knows my wishes and how to distribute my things.

Based on my years of experience in this field I highly doubt this is true in the majority of cases.  I find it more likely that each of your family members has a different view on what to do with your belongings. Avoid family feuds by designating where your money and sentimental things will go when you pass away.

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Long Term Care Planning

ponderingHave you been pondering how to cover the cost of long term care?  Long term care insurance is one way many people choose to protect themselves against the cost of long term care at home or in nursing facilities.  Whether long term care insurance is right for you is often a factor of your resources, your health (although good health today can change in an instant), your family situation and your age at the time you are considering such a purchase.

Recently an article was shown to me addressing the question of whether a group long term care insurance policy is always the best alternative over an individual long term care insurance policy.  This article is found at the website of the Association for Long Term Care Planning.  Other resources can also be found there.  You should be alert that this organization supports those who market long term care insurance, so their slant on things may be biased.  But view the information and weigh that bias into your own evaluation.

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Recently Married Persons Should Make New Wills

Astute persons realize that executing a will makes wedding-ringssense even for single individuals.  In fact, from the perspective of the estate planning attorney, working with single persons is often more challenging than working with married couples, regardless of whether they have children.  The single person may have difficulty determining who they want to name as beneficiaries or designate to serve as executor under their will.

The question this post addresses is what that single person should do if they marry.  The answer, as you might expect, is to update the will as soon as possible after the marriage.

It is not unusual for a single person to leave their estate to their parents or siblings.  But if that will is not changed after marriage and before death, how is the surviving spouse treated?  Do they inherit because they are were married to the decedent?  In Texas, the answer is a qualified “no.”

Some states have laws recognizing a pretermitted spouse.  Those laws provide that if a person marries after making a will that omits his or her spouse, the surviving spouse will inherit a share of the estate equal to that which the surviving spouse would have received if the testator had died without any will.  If such a law existed in Texas that would mean that the surviving spouse would inherit all of the couple’s community property and usually half of the decedent’s separate property.

But Texas doesn’t have a law recognizing a pretermitted spouse.  So in the case described above, the surviving spouse in Texas would retain ownership of their own half of the community property but would receive nothing else from the decedent’s estate.

This example serves to illustrate why it is important to consult with your estate planning attorney any time you have a change in your family situation.  In some instances and if your will is drafted appropriately, you may not need to make any changes to your will.  But as illustrated in this example, there are many times when changes in your family situation can drastic repercussions on your estate plans.  If you make a Will before you get married and would like your new spouse to be your beneficiary, it is important that you update your will.

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Are Firearms in Your Estate?

If you own any firearms or ammunition, you needgun_with_bullets to be especially vigilant in your estate planning.  Not only must you determine if your firearms and ammunition must be registered under the NFA and possibly other laws, but you need to ensure that your beneficiaries are appropriate persons to receive those items, and your executor and successor executors are also appropriate persons to receive, possess, ship or transport those items.  Failure to do this could get your loved ones in trouble with law enforcement authorities.

You may want to consider employing a gun trust, which is a special type of trust for owning certain firearms.  But you should also familiarize yourself with state and federal laws related to firearms and their transfer.  Certainly consulting a licensed firearms dealer should provide you much background.

If you are no longer using your firearms and ammunition, you may find it easier to dispose of those items now rather than passing on an undue burden to your loved ones, who may not be prepared to deal with these assets of your estate.

A great deal of federal firearm information can be found at the website of the Bureau of Alcohol, Tobacco, Firearms, and Explosives (“ATF”) and their explanation of the National Firearms Act.

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