Estate Planning Documents and FAQ
Last Will and Testament
- Your will states who gets your property when you pass away, and importantly, who will not receive your property. Without a will, Texas law will make these decisions for you. If you are the last surviving parent of a child, you may also designate who will care for your children in the will.
- What property will pass through my will?
- Your will controls property that's in your name alone when you die, like your car, furniture, bank accounts without a beneficiary, and your share of property you own with others. It does not control property that has a named beneficiary (e.g. life insurance, bank accounts with beneficiaries, retirement accounts), property in a trust, or property you own jointly with someone else that has survivorship rights.
- What if I die without a will?
- Texas' law of intestacy will determine who gets your property if you die without a will. Generally, if you're married and have no children with another person, your spouse gets your community property and may share your separate property with your children. If you're not married, your property goes to your children, and if you don't have children, it goes to your parents, then siblings, and so on down the family tree. The problem is this one-size-fits-all approach probably doesn't match what you actually want, and it doesn't let you name a guardian for your kids or make any special arrangements.
- Can I set conditions for the transfers of property in my will?
- Yes, you can put reasonable conditions on gifts in your will, like saying your nephew gets $10,000 when he graduates college. Texas courts won't enforce conditions that are illegal, impossible to follow, or against public policy (like requiring someone to get divorced or change their religion). If you want more control over how and when someone receives property, a testamentary trust in your will gives you more options and protection. A testamentary trust allows you to transfer property to a trust which is managed by a trustee designated by you or the benefit of a beneficiary. Testamentary trusts are commonly used for leaving money to minor children, people with special needs, people who are not good with money, or loved ones with debt problems subject to collections.
Revocable Living Trust and Pour Over Will
A trust is like an account where you put your property while you're alive, and you maintain control of everything in that account. When you pass away or become incapacitated, the trustee, a trusted person you choose, takes over as CEO of the account and, if you have passed away, distributes the trust property to your loved ones without going through court. For assets in the trust, you do not have to go through probate, which saves time, money, and keeps your business private. You can change or cancel this trust anytime while you're alive
A pour over will is a simple will which passes any property which has not yet been transferred to your trust during your lifetime into the trust. If there are assets which were not transferred into the trust, such as assets acquired right before death, or forgotten assets, the pour over will must be probated to transfer those assets into the trust. Because of the simplicity of the pour over will, probate costs are usually lower for those with a trust and pour over will in place. Should I use a revocable living trust or testamentary trust? Choose a revocable living trust if: You want to avoid probate entirely and keep your estate private. You own real estate in multiple states (avoids probate in each state). You want someone ready to manage your property immediately if you become incapacitated without court involvement. You have a larger or more complex estate where probate costs would be high. You value privacy and don't want your assets and beneficiaries becoming public record. You're willing to do the work now to transfer property into the trust. Choose a testamentary trust if: Your estate is relatively simple and probate costs in Texas would be minimal. You want the control and protection a trust provides (for minor children, someone not good with money, etc.) but don't want to deal with funding a trust right now. You're not worried about probate or privacy. The upfront cost of creating and funding a living trust doesn't make financial sense for your situation.
A pour over will is a simple will which passes any property which has not yet been transferred to your trust during your lifetime into the trust. If there are assets which were not transferred into the trust, such as assets acquired right before death, or forgotten assets, the pour over will must be probated to transfer those assets into the trust. Because of the simplicity of the pour over will, probate costs are usually lower for those with a trust and pour over will in place. Should I use a revocable living trust or testamentary trust? Choose a revocable living trust if: You want to avoid probate entirely and keep your estate private. You own real estate in multiple states (avoids probate in each state). You want someone ready to manage your property immediately if you become incapacitated without court involvement. You have a larger or more complex estate where probate costs would be high. You value privacy and don't want your assets and beneficiaries becoming public record. You're willing to do the work now to transfer property into the trust. Choose a testamentary trust if: Your estate is relatively simple and probate costs in Texas would be minimal. You want the control and protection a trust provides (for minor children, someone not good with money, etc.) but don't want to deal with funding a trust right now. You're not worried about probate or privacy. The upfront cost of creating and funding a living trust doesn't make financial sense for your situation.
Statutory Durable "Financial" Power of Attorney
- The statutory durable power of attorney let's you pick someone you trust to handle your money and property if you can't do it yourself because of illness or injury. They can pay your bills, manage your bank accounts, and handle your business so your life doesn't fall apart while you recover. Without this, your family may have to go to court and get a judge's permission to help you through guardianship, which costs substantial time and money.
Medical Power of Attorney
- Your medical power of attorney designates a representative to make healthcare decisions if you are unable to speak for yourself. Your representative will talk to doctors, consent or decline to consent to treatments, and make sure your wishes are followed. You may also designate any medical preferences and treatments you do not want to receive within the medical power of attorney.
Designation of Guardian in the Event of Incapacity
- While some families scramble to find a guardian to step in and make decisions for a loved one who has become incapacitated, the designation of guardian allows you to decide who would be your guardian in advance of any condition that requires you to have a guardian. The guardian may be designated to have authority over your assets (guardian of the estate), your body and personal decisions (guardian of the person), or both. Choosing this person in advance of any need saves you and your loved ones the stress and difficulty of making that decision after you are unable to do so.
Directive to Physicians
- The directive to physicians tells your medical professionals your preferences regarding life support. In the event you are facing a terminal or incurable illness which results in the need for life support, making your own decisions in alignment with your values in advance will save your family substantial stress and emotional turmoil.
Do Not Resuscitate Order (DNR)
- If desired, a DNR tells your medical treatment providers not to administer treatments like cardiopulmonary resuscitation (CPR), cardiac pacing, defibrillation, advanced airway management and artificial ventilation.
Transfer on Death Deed
- The transfer on death deed lets you name someone who will automatically get your house or land when you die without going through probate court. You keep complete control of the property while you're alive. You can sell it, rent it, or change your mind about who gets it. It's one of the simplest ways to pass real estate to your loved ones in Texas.
Lady Bird Deed
- Like a transfer on death deed, the lady bird deed allows you to name someone to receive your real estate when you die without going through probate. For technical and legal reasons, if you have received Medicaid benefits, a lady bird deed is considered superior to avoid potential clawbacks from Medicaid, or claims that your real estate should be used to pay back the government.