There are several good reasons to review your estate plan and possibly update the plan to ensure your loved ones are protected.
Establish or update your will.
If you die without a will, the laws of Texas will determine the fate of your minor children and assets.
I love Texas, but I do not want the Texas Legislature and all of those politicians deciding how my assets will be divided.
Now, if you feel comfortable with elected officials giving your property away, then you don’t need a will. If you are like me and don’t want to be at the mercy of the state legislature, then you need a written wWill to make your wishes known.
The main purposes of the will are to name your beneficiaries (the people who will receive your assets), a guardian to care for your minor children (if any) until they reach adulthood and an executor, who will be responsible for the administration of your estate.
Review your beneficiary designations.
A will or living trust document does not override beneficiary designations for bank accounts, life insurance policies, retirement accounts and so forth.
It is important to periodically review your beneficiary designations, especially if you’ve experienced a significant life event (such as marriage, divorce, or the birth or adoption of a child).
This may seem like common sense, but failure to update beneficiary designations is a very common oversight.
Typically, the person named on the most recent beneficiary form will automatically get the money when you die, regardless of what your will or living trust document says.
So, if you’ve forgotten to update your beneficiary designations, or you erroneously think it doesn’t matter because you have a will or living trust, you’ll need to fix your designations immediately, or your ex-spouse may end up with an inheritance from your life insurance policy.
Beyond just ensuring that your money goes where you want it to go, another advantage of designating beneficiaries is that it avoids probate. That’s because the money goes directly to the beneficiaries you’ve named by operation of law.
Establish or update your Medical Power of Attorney and/or your Financial Power of Attorney.
It seems like I have had multiple phone calls over the past couple of weeks, where a potential client is in the hospital and needs a Power of Attorney “immediately!”
Nowm I try to assist them, but unfortunately, most of the time, it is too late for the execution of a valid Power of Attorney.
The time to complete a Power of Attorney is when you don’t need it.
That way, it is sitting there waiting for that emergency.
Review your Real Estate Ownership designations.
If you are married and own real estate, you need to determine if the real estate is considered Separate Property or Community Property.
This determination will be important when it comes to how real estate is inherited.
If you don’t have a will, then the separate property real estate will only go to your heirs, even if your spouse is living in the house.
Now the spouse will have the right to live in the house, but your spouse will not own it. If the property is community property, it is handled differently.
And if you have a will, the property can go to anyone you choose. So, it’s essential to make sure the ownership of the real estate is correct.
Paul B. Owens is an attorney practicing in the areas of Probate and Estate Planning law. He serves in many other capacities, including the Board of Directors for the CASA Helotes Senior Center in Helotes, Texas. He may be reached at his office in Helotes at 210-695-5110 or www.PaulOwensLaw.com
Editor’s Note: An advertisement for Paul Owens Law appears in this issue of the paper.