EXACTLY WHAT IS ESTATE PLANNING?
A Straight Shot from Bob Leonard on “Exactly What is estate planning”.
Many people believe that estate planning involves minimizing estate taxes when you die. While it does that, it also does much more.
Actually, planning for estate taxes is rarely done these days. The current exemption on estate taxes is over $5,000,000 and twice that for a married couple. Obviously, only an incredibly small number of estates will be subject to the estate tax under those circumstances.
Estate planning, however, does much, much more. Estate planning involves deciding who you want to receive your property when you die. Many people think their property solely consists of their house and if they don’t have a house, they really don’t have any property. Of course, that is not true; your property consists of virtually everything you own including life insurance policies, jewelry, furniture, artwork, bank accounts, retirement plans and any other type of asset that you might have. It may include your business. With proper estate planning, you may get to make the decision about what happens to those things rather than the State of Texas.
Estate planning also allows you to consider your liabilities. Does that house have a mortgage on it? Is there a lien on the cars? Is there bank debt? Do you own a business that still needs to be operated? If there is debt on a particular piece of property, do you want it to be the liability of the person getting that property or the estate? These are all considerations in estate planning.
Estate planning does even more, though. A well-thought out estate plan will involve making decisions about what happens should you become incapacitated later in life. Who do you want to handle your money? Who do you want to make medical decisions for you? Who do you want to make any other decisions that have to be made. With proper estate planning, it is possible to avoid an expensive guardianship should those circumstances arise.
What happens if a guardianship is still necessary? Most well-thought out estate plans will allow you to designate who you would prefer your guardian to be and, sometimes more importantly, who you do not want it to be. That sends a strong message to the guardianship judge as to what you would prefer to do.
Many estate plans involve signing a directive to physicians, sometimes called a living will. This allows you to make a decision as to whether or not you want to be artificially kept alive if you are not able to make a decision while you are in an irreversible or terminal condition with little time to live.
Some people know that they have relatives that can’t agree on everything, and those people might want to designate what is to be done with their remains and who is to make funeral decisions for them. These people know that if they don’t make that decision ahead of time, it will likely lead to a messy, expensive fight in the future.
Estate planning is particularly important if you have a blended family. Anytime there are children from one marriage and a spouse or children from another marriage, there is a potential for significant disagreements and expensive litigation after your death. Estate planning is far more than writing a Will.
If our estate planning attorneys at the Bob Leonard Law Group can help you resolve some of these issues and put your mind at ease, please give us a call at 817 336 8500.