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Is the Essential Estate Planning Package right for you?

April 28, 2020 - One of the more frequent questions I get is whether our Estate Planning Package is right for a person or family. Well, I thought I would give a few thoughts about that.

For the vast majority of people, estate planning is not and should not be hard. Some attorneys and law firms either do not effectively communicate what needs to be in place or they have other less noble motives for making the process seem complicated and in need of an expensive and complicated solution. I am sure there are people who need a $5,000 revocable living trust, but in my opinion, those people are few and far between. The majority of people I work with simply do not need that complexity or expense. Rather, most people fall into several groups: (1) Group 1: Married with children; (2) Group 2: Divorced or single parents; (3) Group 3: Single persons without children; and (4) Group 4: Empty-Nesters (i.e., older couples with adult children). In my opinion, most of these people do not need anything complicated.

KISS PRINCIPAL - Keep it simple

Also, it is probably a good time to explain my philosophy of estate planning: KEEP IT SIMPLE. It is rarely better to make it more complicated. With basic estate planning, there are two main goals - take care of what happens when you die and take care of what happens if you don't die, but are incapacitated. That is what the Estate Planning Packages do.

The Will

What most people need is a will so that when they die, their wishes are memorialized and carried out. No one should die without a will - which is called dying "intestate." Our Estate Planning Package covers this. You can spell out who inherits from you, what they get, designate an executor, and name a guardian for your minor children. You can also establishes "contingent trusts" for your minor children to protect their inheritance until they are old enough to manage it themselves. A contingent trust is one that only comes into existence if it is needed. If you child is 34 when you die there is no need for a trust. But, if they are 14, the trust is created as part of the probate process.

Revocable Living Trusts

These trusts are not the same as revocable living trusts (RLT's) that some people and attorneys talk about. I am not a fan of RLT's except in very limited circumstances involving high net worth or there is a need for additionally liability protection or asset protection. The Estate Planning Packages are not designed for these situations and do not include RLT's.

I also need to explain something about that word - "probate." Probate is the term used to describe the process of the State recognizing someone's will and honoring it. There are two kinds of probate: testate (with a will) and intestate (without a will). Some people believe that the probate process is long, complicated, and expensive. It can be if you die intestate. However, if you have a will Texas has a very efficient and effective probate system. If your will is properly drafted, probate is fairly inexpensive and quick. Now, "quick" in a legal sense is 3-6 months (trust me that is fast in legal terms). You should not fear probate in Texas if you have a will.

The Probate Process

Here is how the probate process generally works:

1. Someone dies.

2. The person named as "executor" or any "interested party" files an application to admit the will to probate.

3. The heirs are served with "notice" of the application or sign "waivers" of citation to let the court know they are aware of the application has been filed.

4. A hearing is held where the court reviews the will, makes sure it is "self proved" or that it has the required affidavit of the witnesses. At that hearing, the applicant (the executor) testifies to certain required things like who the decedent was, where he died, where he lives, that he had a will, that the will provided is the original, and other "required" things.

5. If everything checks out, the court will "admit" the will to probate, issue "Letters Testamentary" appointing the executor, administer an "oath" to the executor, and waive the requirement to post a bond.

6. After that, the executor will issue a notice of the probate in the local paper so that any creditors that were owed money by the decedent can file a claim to be paid. Creditors get paid before beneficiaries get distributions.

7. The executor then prepares an Inventory of the Estate telling the court and creditors what its assets are. This is reviewed and approved by the Court's auditor.

8. Once the Inventory is submitted and approved, the executor waits for the time for creditors to file claims to expire. Creditors have 4 months to make claims. When this time expires, the creditor evaluates the claims and either "accepts" or "denies" the claims. Accepted claims are paid. Denied claims are not, but the creditor can bring a claim against the estate in the probate if they contest the denial.

9. Once all claims are resolved, if there is money left it is distributed per the terms of the will.

10. After distributions, the estate can be closed.

This is not overly complicated and need not be expensive.

The Other Documents

The other documents in the package are for the situation that you are incapacitated and cannot make decisions for yourself.

The durable power of attorney allows you to appoint someone to make financial decisions for you if you cannot. The medical power of attorney allows you to appoint someone to make medical decisions for you. You can grant broad powers or limited powers in both instances. You should always have a primary agent and at least one alternative agent. Most people make their partner/spouse their primary and then have a back up.

The Physician's Directive, also referred to as a "Living Will", allows you to make two important healthcare decisions in advance. The two decisions are "how do you want to be treated if you have a terminal condition and are expected to die within 6 months?" and "how do yo want to be treated if you are suffering from an irreversible condition and not expected to improve?" In both instances, you can chose either: (1) keep me comfortable but allow me to die or (2) keep me alive using all available medical treatment. By making these choices, you are essentially taking these decision out of the hands of the person that holds your medical power of attorney.

All Documents Working Together

Together, the Will, power of attorney, medical power of attorney, and Physician's Directive cover most of the situations are "normal" family will encounter. There are, of course, exceptions. For instances, if you have a child with special needs you may need some additional documents. This is especially true of your child is over 18 and a legal adult. Moreover, if you want to put a lot of restrictions and conditions on how your children inherit from you, you may need something more complicated.


Also, you have to remember that you do not draft your estate plan once and forget about it. You should review you plan every 3-5 years, or as major life events occur (marriage, birth of a child, death of a family member, new job, moving to new state, etc.) to make sure it still fits your family's needs.

In the end, I believe the Estate Planning Packages offer great value to most people and families to cover their basic estate planning needs. The package addresses the most common issues and provide peace of mind. However, it may not be suited for people and families with complicated situations.

Call or email me if you have questions:

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