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Steven R. Booker, P.C.

Estate Planning

Estate Planning

Estate planning is extremely critical not only to protect yourself and your assets, the things you’ve worked your whole life for, but also for your family’s benefit. Unfortunately, most people don’t see this as such a priority. In fact, only about 4 out of 10 Americans have a Will or Living Trust in place. The reason? People simply say they just, “haven’t got around to it” while others claim they, “don’t have enough assets to leave anyone.”

Planning for our death or incapacitation is not on the top of our to-do lists. We tend to live our lives with the hope that we will not die anytime soon. However, we know that death is inevitable and we just don’t know what each day will bring. Therefore, we also know how important this inevitability is to plan for. Of course, good estate planning will give you the peace of mind you need knowing that yourself and your loved ones will be properly provided for. Whether you have a large or small estate, you need to be sure that your wishes are followed upon your death or incapacitation.

There are a lot of misconceptions about estate planning and because of these misconceptions, a lot of people don’t realize the tremendous benefits that come about because of it. Having a plan in place can lift an enormous burden off of you and your loved ones. [Check out our free report on the 20 Most Common Misconceptions About Estate Planning.]

Estate planning can be broken down like this. It is the accumulation of assets, or earnings, the preservation of those assets, management of those assets upon disability or incapacitation, and the distribution of those assets when you die. It is pretty straight forward, however, there are some challenges that must be taken into consideration and those challenges are probate, death taxes, and guardianship.  

Probate

Probate is the legal process by which the probate court assumes authority over the estate or assets of someone who has died. The court identifies assets, identifies who is in charge of the assets, supervises payments of debts to creditors, pays taxes and probate fees, and oversees the distribution of the remainder of the assets to the beneficiaries and/or heirs.

The Probate process can be a lengthy one. Some of the less complicated estates take about six to nine months to complete. Before the distribution of any assets, the creditors notice must be published for four months, so this step alone takes quite a while. On top of that, you have the inventory and appraisals, paying the creditors, and the distribution of assets to the beneficiaries, which all add additional months to the process. There are also some issues that could arise, which would further delay the process. These delays could include the Will being contested, disagreements regarding the property and/or assets, difficulties with the transferring of titles, or complicated tax problems.

There are certain circumstances in which Probate can be avoided. Each state has their own laws and statutes; however, these are some common Texas and Oklahoma ways to maintain exemption from Probate:

  • Living Trusts – A Living Trust can avoid Probate for virtually all of the assets you own – real property, bank accounts, stocks and bonds, vehicles, and so on. You will create a Trust document that names an individual to take over as trustee, termed successor trustee, upon your death. Next, you transfer the ownership of your property to yourself as the trustee of the trust document. Once completed, the property will be maintained and controlled according to the terms of the Trust. Upon your passing, the successor trustee will have the ability to transfer the property and assets to the beneficiaries without having to go through probate court proceedings.
  • Joint Ownership – If you and someone else owns property and the ownership includes the “right to survivorship,” then whoever survives automatically inherits complete ownership of the property when one owner passes away. Although some paperwork will be required in order to show that title to the property is now held solely by the surviving owner, probate will not be necessary to actually transfer the property.
  • Enhanced Life Estate Deed/Lady Bird Deed – With this type of document, you can name a beneficiary to inherit your property while maintaining ownership of it for your entire lifetime. You also are able to avoid probate. This option is only available in Texas.
  • Transfer on Death Deed – This is a simple and inexpensive way to transfer property to another individual upon your death. This document also avoids probate.

Estate and Inheritance Tax Planning

Tax planning is a very important aspect of estate planning that needs to be considered in order to help preserve your estate. Even if you have planned for the distribution of your assets, without taking estate tax planning into account, something the majority of people do not consider, the assets and properties you left behind to your heirs and beneficiaries can be significantly impacted and depleted.

Disclaimer: We will consult with tax experts to protect you in this way.

Asset Protection

You’ve worked your entire life to accumulate what you have today, so it is crucial that you take the precautionary measures to ensure your assets are protected. By attaining this asset protection, you will add security against creditors, claims, and lawsuits to personal and/or business liability.

Protect Your Heir from Divorce

We've all heard those stories where a daughter-in-law runs off with the son's inheritance. Don't let that be you. 

Unfortunately, according to the American Psychological Association, about 40 to 50 percent of married couples in the United States divorce. Equally as unfortunate is the number of lawsuits that come along with these divorce cases. The good news, however, is that just like there are strategies to minimize taxation, there are also strategies to protect your heirs from divorces. Beneficiary controlled trusts and other asset protection trusts can be powerful tools to ensure that your children and grandchildren maintain a high level of protection from divorces and other lawsuits.

Wills

A Last Will and Testament is actually a quite simple and very affordable way to make sure your assets are distributed to the intended places. A good Will is comprehensive, clearly-stated, easy to understand, easy to administer, and has the durability to stand up in court and completely fulfill the wishes of the deceased.

In contrast, poorly written and never updated Wills can be a nuisance and only cause headaches for the administrators as well as a lot of wasted time and money. And even worse, dying without a Will can be very expensive for your family and you no longer have a say in who gets what because state law gets to decide. 

In addition to a Last Will and Testament, everyone should have a Durable Power of Attorney, a Designation of Healthcare Surrogate, and a Living Will. These documents will allow your loved ones to help you when you cannot help yourself.

Trusts

Creating a truly effective estate plan means things happening exactly as you want them to, and for a lot of people, that means their estate completely avoids probate. A Revocable Living Trust is the best way to accomplish that. Living Trusts are terrific for avoiding probate, to make things easier for those you leave behind, and for blended or mixed families, however, not everyone needs a living trust.

We will be happy to discuss all of your options.

Why You Need an Estate Plan

Estate planning is mapping out and deciding what happens to you and all of your possessions if at any point you become incapacitated or you pass away. Why should your lifetime of hard work go to waste or go to someone you don't intend for it to? Estate planning means protecting yourself, your assets, and your family. 

People who pass away without a Will and have assets leave a huge burden on those they leave behind. Think about getting a list of all of your “stuff”, and how hard that would be. Now, consider this: if it’s difficult for you to account for all your “stuff”, imagine how hard it would be for someone else, or a loved one to come in, not knowing where anything is, to get all your “stuff” in order, all while trying to grieve at the same time. The more planning you do now, the less burden you place on those you leave behind.

Common goals of estate planning:

  • Keep control of your property
  • Protect yourself and your family
  • Get your assets to the people you want without any unnecessary costs

Contact us today at (940)569-4000 to start planning your future!

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