While estate planning is definitely about deciding how your property is distributed after you pass, that's only one of its purposes. In reality, estate planning is crucial for doing much more. If you think about it, estate planning does all sorts of things, ranging from protecting your family's younger members to helping charities. Here are some of the purposes served by estate planning.
The most obvious purpose is determining how your property is distributed and to whom after you die. If you don't have a legally recognized will, the state will decide how to divvy your property. Intestacy situations also mean the state will decide who receives your property.
Taking Care of Minors
If you die intestate (i.e., without creating a legally valid will), the state will determine your children's guardian if your spouse isn't fit or alive. Drafting a will gives you greater control over who raises your child, as you can decide. Additionally, it also permits you to set up a trust and trustee who can manage your leftover assets in your children's interest.
Going through the probate process is infuses your assets with a layer of protection against creditors. Debt collectors typically have a limited time (less than six months) to file a lawsuit and pursue collection. Additionally, you can title your property in a trust's name. This prevents creditors from collecting your property to satisfy yours or your heirs' debts.
Leaving Property for Loved Ones and Charities
Wills permit you to decide how and to whom your property is distributed. This includes distributing assets to charities and friends. Friends and charities aren't considered heirs, so they won't get anything in the situation of intestate succession. Additionally, distant relatives may also not receive anything depending on how your family is organized. It's best not to rely on the state's definition of an heir to distribute your assets to your loved ones, as some don't fit the criteria.
You'll need an attorney's help to use estate planning to cut your estate's tax liability. An attorney can help you reduce your estate's tax liability using beneficiaries, gifts, and trusts.
If you're looking for an attorney to assist you with your estate planning, get in touch with us at Mike Massey Law. We provide trust, probate, and estate planning attorneys in Austin, Houston, Travis, and Harris County.