The term "estate planning" can seem daunting. Many people believe it doesn't apply to them. However, when you look at what comprises an "estate," you'll see that virtually all adults have one.
An estate is simply a person's assets. These include:
- Real estate: your primary home, any vacation homes and even timeshares
- Personal property: your cars, jewelry, furniture, artwork, antiques, collectibles and other personal items
- Financial assets: bank accounts, retirement accounts, stocks, savings bonds and cash
- Life insurance policies
If you own a business, that's part of your estate as well.
While no one enjoys contemplating their inevitable mortality, it may help to think of estate planning as something you do for your loved ones. Estate planning not only gives you the opportunity to designate how your assets will be divided, but it makes things easier on your loved ones.
With a solid estate plan, you'll save your family, time, stress and money on fees and taxes. Depending on how large your estate is, inheritance and estate taxes can eat up a major chunk of it. Careful planning can allow all of your assets to go to your loved ones and other beneficiaries rather than to the federal government.
You determine how comprehensive your estate plan is. A key component of all estates is a will. However, you may also choose to place some assets in one or more trusts. It's also wise to give people the authority to handle financial matters and oversee your medical care if you're not able to do so.
Texas, like most states, allows people to draw up an advance directive that communicates their wishes regarding their health care if they become ill or incapacitated to the point where they aren't able to communicate those wishes to their medical providers.
By sitting down with an attorney experienced in estate planning, you can work out a plan that will help ensure that your wishes are carried out for your assets and your loved ones when you're no longer around.