Many people in Texas assume that estate planning is only for the very wealthy. In reality, everyone needs to do some of it no matter how many assets they own. Without any planning for the future, the contents of your financial accounts could end up being drained by government fees instead of going towards the care of your family.
Create a will
Drafting a will is the first and most important step in creating your estate plan. Your will doesn’t have to be too detailed, it’s just important that you have one. Without any will, your estate will have to go through the probate process, and the disbursement of your assets will be based on intestacy laws.
If you already have a will written out, you should make sure that it is up-to-date according to your current wishes. For example, if you’ve had new grandchildren born recently, you may want to update your will to make sure they’re included.
Update your beneficiary designations
Beneficiary designations are an incredibly important part of estate planning that many people forget about. Remember when you opened your new bank account 20 years ago? At that time, you were asked to provide the name of the person you wanted to inherit the contents of your account should you pass away. It’s a good idea to update beneficiary designations just in case your wishes have changed.
Powers of attorney
Your estate plan doesn’t only concern where your assets should go after you pass away. A detailed estate plan also provides for your care should you become incapacitated. Preparing powers of attorney and a health care proxy allows you to name the people you trust to make certain types of decisions for you if needed.
Consider setting up a trust
If you have a fairly complex financial portfolio that includes businesses and real estate, you may want to consider setting up a trust. A trust provides more control over how your assets are distributed as well as more privacy for your beneficiaries.