Strategists say one should begin with the end in mind. If you do not decide how you want your property to be handled when you pass on, the laws of the State of Texas will decide for you. This may not turn out the way you thought, especially for blended families. Deciding for yourself and leaving clear plans are a kindness to your family.
If you have young children, having a will allows you to express your wishes regarding who will care for them and decide who will handle the money. The same person can be in charge of the money and in charge of the everyday caring for your children, but it does not have to be the same person.
Creating a trust in your will protects the money going to your children (or grandchildren) if they are still too young to handle money. By putting this in your will, you decide who will be the trustee, carrying out your wishes for how to handle the money you leave your children or grandchildren. Leaving money directly to someone under 18 years old will cause problems and require court action, but planning ahead will prevent that complexity. If you want to learn more about these protections, please contact us for more information.
What is an Estate?
When someone dies, that person has left behind an estate, which is the legal term for everything that person owned. Even those who had very little have an estate. An estate can be as little as a person’s clothes and other personal effects or can also include substantial assets, like real estate, investments, cars, boats and so on.
The Federal Estate and Gift Tax changed several times in the last few years with the most recent changes taking effect in January 2018. For year of death of 2024, the exclusion amount is at $13,610,000.00 per person, and married couples have a combined limit of $27,220,000, so very few families are likely to be impacted under the new law compared to earlier exemption limits that have been as low as $60,000. (This time, these limits are indexed to inflation, so they will keep going up as our economy grows.) Your taxable estate includes things that do not pass through your will, like life insurance death benefits, 401(K) and IRA accounts, and other assets that pass through a contractual agreement with the insurance company, brokerage company, bank or other type of company holding the account.
What Happens to the Estate?
Some estates are very small and “handling the estate” may not require any legal action. If the person who died owned any property with a written title, like a house or a car, it is likely that passing that title will require action by the probate court. If the person who died had a will, the will gets probated in the probate court. If there’s no will, the probate court is still the place to go for handling the estate. Handling the probate when someone dies without a will requires more steps than when there is a will, and costs more money.
If you need to probate a will or handle an estate for someone who died without a will, you are required to have a lawyer help you. The probate courts will not allow an executor (the person chosen in a will to carry out the wishes of the one who died) or administrator (a person who is handling an estate for someone who died without a will) to handle the estate case without a lawyer. While a people can always represent themselves, executors cannot appear without a lawyer because executors are not representing themselves. Instead, the executor represents the estate of the person who died.
How Having a Will is Cheaper and Easier
A common provision people include in their will is to give their executor (the person chosen in a will to carry out the wishes of the one who died) the powers of independent administration – which means that the executor can carry out the instructions in the will without needing the court to give an okay to every action. If there is no will or the person named as executor does not fulfill that role, the court will appoint an administrator for the estate. Without the power of independent administration, this is handled as a dependent administration, which requires the executor or administrator to get the court’s okay for every little thing. This is another way that having a will helps those you leave behind, because getting the court’s permission for every action is expensive and time consuming.
Another common provision people include in their will is to say that they do not require their executor to post a bond. Without this language, the probate court will usually require the executor to post a bond that is equal to what the estate is worth, which can be an expensive thing to do – and sometimes the person you wanted to handle things for you cannot do it.
If someone dies without a will, the probate court will have to confirm who the legal heirs are. This legal process is called a Determination of Heirship. In Texas, the court is required to appoint a lawyer to be the attorney for unknown heirs. That lawyer looks for any other heirs. That lawyer gets paid for their work. With a will, the estate saves that money.
While it takes a little time and costs a little money to get a will, it will save time and money for your loved ones.