We just wrapped up our inaugural Lasting Legacies Series of the year at the Tom Bass Center in Harris County’s Precinct One. Lasting Legacies started in 2023, and the point of it is to help educate you about the importance of protecting your estate. Everyone should know the importance of having a plan to protect your family’s legacy which includes the importance of having a Will prepared, transfer upon death deeds, payable upon death bank accounts, powers of attorney appointments, and the importance ofensuring that insurance beneficiary designations are kept up to date. You’ve worked hard for what you own, and you should ensure that your family and loved ones are taken care of in the future. We are here to break it all down for you because we know how important this is to you and your family members. It is important to mention that the following information is not legal advice. We hope you can join us at one of the Lasting Legacies this year to learn more and ask questions! Sign up for our newsletter to stay in the know!
What Is an estate?
It’s essentially everything comprising the net worth of an individual. This can include land and real estate, bank accounts and cash, possessions such as cars, jewelry, or artwork, and all other assets that the individual owns or has a controlling interest in. This can also include any debt you may have.
There are many ways to plan including executing a will, transfer on death deeds, power of attorney documents, among other essential estate planning considerations. If you died without a will or other valid transfer device, your property will be divided between family members according to a formula established by Texas state law. This means that no will or an incomplete will shall lead to the intestacy formula. A will is the foundation of your estate planning. It is a legal document in which you identify the people or institutions that should receive money and property from your estate after your death. It provides your instructions for what you want done with the property you leave behind when you die. To execute a will, you must be at least 18 years of age, married, or in the Armed Forces and of sound mind.
What Goes Into Your Will?
First, you’ll include your name, heirs/beneficiaries (including your spouse, children, siblings, and other family members), and an identification of the executor and successful executor of your will. In the state of Texas, you name an executor who will ensure that the instructions in your will are carried out after your death. If you don’t name anyone, the probate court will appoint someone to take this role. This person must be at least 18 years old, of sound mind, never convicted of a felony, and have no conflict of interest.
What else goes into your will? The powers of the executor should be included such as how to wrap up your estate and instructions for distributing your estate after your debts are paid. You should also include the distribution of your estate. This can include gifts but cannot include things like life insurance benefits. A residuary clause will also be included which instructs how to transfer assets not typically mentioned elsewhere. You will also list a guardian for your minor or disabled children if you are unmarried or married and both spouses pass.
To make your will legally binding, it must be in writing (although handwriting it, is not usually a good idea), signed by you or someone else in your presence at your direction, and must be signed by two witnesses. These witnesses must be at least 14 years old and must sign in your presence. You are not required to get these signatures notarized, but doing so can help speed up the process by making the will “self-proving.”
You may revoke or change your will by destroying or canceling all or part of it, ordering someone else to destroy all or part of it in front of you, another writing that says it revokes all previous Wills while following the same formalities you used to make the original Will. If you and your spouse divorce, Texas law revokes any language in your Will that leaves property to your spouse or names your spouse to be your executor. This rule also applies to any relative of your spouse who is not your relative.
When making a Will, be careful with DIY websites. Examples of failed estate plans include the Will not including the disposition of all assets (including the home and personal possessions), not designating or empowering an executor, not being updated to include changes in assets, and not being properly signed, attested, and self-proven if applicable.
Transfer on Death Deed
Next, we’ll cover a transfer on death deed. This is a simple way to transfer real estate to someone else after you die. When you pass, your property interest passes to the person you named, with no probate needed. The requirements for a transfer on death deed are as follows: it must contain a legal description of the property, the name and address of the designated beneficiary/beneficiaries, be signed by the property owner (grantor) in the presence of a notary public, state that transfer to the designated beneficiary will not occur until the grantor’s death, and be recorded before the grantor’s death in the (county) deed records where the real property is located. It can be revoked during the grantor’s lifetime, but the revocation must be signed, notarized, and filed as indicated above.
What Is Power of Attorney?
Power of Attorney is the legal authorization for a designated person to make decisions about another person’s property, finances, or medical care. It is to prepare for a situation where you may not be able to make the decisions on your own. The principal is the person who signs the document giving someone else the authority to act on their behalf and the agent is the person being given the authority to act for the principal.
There are three types of power of attorney. The first is medical power of attorney. This gives the agent authority to make medical treatment decisions for you if you become mentally or physically unable to make your own decisions. The second is durable power of attorney. This gives the agent authority on a broad range of matters for you, and continues if you become mentally or physically unable to make your own decisions. Third is springing power of attorney. This gives the agent authority only if and when you become disabled or incapacitated.
The requirements for power of attorney are as follows: it must be signed before a notary public, the signing principal must be at least 18 years old, the principal must be of sound mind, it must state power of attorney type and powers being granted to the agent, and the grant of authority in the power of attorney controls when it ends (it may have an ending date, may be revoked, etc.)
Estate Planning Considerations
Lastly, we will cover other estate planning considerations. Life insurance policies mean the proceeds will go to the beneficiary you provide to the company. Be sure to update this regularly. You may also want a loved one to have access to your phone, email, online accounts, etc. when you pass. Be sure to store your login information somewhere safe. On the topic of guardianship, if a court finds an individual to be “incapacitated”, a guardian will be appointed to make financial, personal, and medical decisions for that person. You can get ahead of this by executing a springing power of attorney.
Be sure to plan ahead so your loved ones aren’t left with legal battles and fees after you pass. After years of hard work, you want your estate to go to those you entrust most. Don’t get caught unprepared. Have your Will prepared and other related documents, as soon as you can.