I’ve always been taught since I was young that there are two absolutes in this world, death and taxes, so it’s extremely important to be prepared for both. Unfortunately, many of us live our lives without considering what could happen to everything that we’ve worked so hard to build when that time comes and what that experience would be for the ones we love. The good (or not so good thing) is that if you don’t take the time to create the plan and you pass away in Texas, Texas has a plan for you inside the Texas Estates Code. That plan may not be one that you like or appreciate and could potentially send your family into turmoil and conflict. Let me tell you about three common misconceptions that I hear far too often.
Misconception #1: Everything Automatically Goes to My Spouse
The first misconception is “when I pass away, everything will go to my spouse and she/he will handle it.” Naturally, that’s a valid belief and it makes a lot of sense on the surface. But, what happens if there was a child born before the marriage? In Texas, that child will be owed an inheritance in things that you may think that the spouse should be able to take care of, such as the family home that you both purchased together. Also, what if the surviving spouse has a disability and is receiving Medicaid? There’s a possibility that without a plan, the surviving spouse inheriting assets could be disqualified from receiving future benefits. Both of these situations happen very often, especially sharing the family home with the deceased spouse’s previously born children. The good thing here is both of these situations are preventable.
Misconception #2: I Don’t Have Enough to Need an Estate Plan
The second misconception is “I don’t have much, so I don’t need to put a plan together.” Sure having a fewer amount of assets may have an effect on the type of plan that you have, but that doesn’t mean that you shouldn’t plan. A fully comprehensive Texas estate plan is more than a Will or Trust. It includes a Durable Power of Attorney, Medical Power of Attorney, Advanced Directive, HIPAA Release, Disposition of Remains, Guardianship for your children or even yourself, and more. These documents are extremely important in that they allow you to decide who will make decisions for you while you’re alive, but are unable to make the decisions for yourself. In fact, you’ll have the ability to put how you want your care to be handled in writing for your agent to follow so there are no fights or questions. I’ve seen scenarios (even in my own family before I became an estate planning attorney of course) where someone became incapacitated in the hospital and their children began to fight over who would have the authority to make decisions. It would have been great if they put in writing who they wanted to handle their financial affairs and medical decisions as well as how those affairs would be handled.
Misconception #3: Estate Planning Takes Too Much Time and Work
The third misconception is “this will take much too long and will be a lot of hard work.” The good thing here is that estate planning attorneys carry the biggest brunt of the workload in putting your plan together. There is some work on your part which includes thinking and talking to your family about who you think would be best in each role, what you’d like to give to whom, and how you’d like for things to be handled from incapacitation to the funeral arrangements. Also, it’s the perfect time to get organized and put together a list of your accounts so that your family doesn’t have to dig through old mail to try to find a bank account that they thought you had 5 years ago. Been there before. When my dad passed, we didn’t know he had an account until several years later (again before I became an estate planning attorney).
Final Thoughts
As you can see estate planning isn’t just a to do list that you need to check off. It could be a family activity used to get yourself organized and put everyone at ease about what will happen when it happens. If you’d like to learn more about what happens if you don’t have a plan in Texas, I welcome you to watch my free training here where we talk more about what can happen without a plan in Texas and how to avoid troublesome scenarios.