It may be difficult to think about, but we all have to face the fact of our mortality – we won’t live forever, and none of us are promised tomorrow. Acting like you are invincible and procrastinating getting your affairs in order will only make it worse for your family when you die or if you become incapacitated. You could leave them in a difficult financial position, without the inheritance you intended to pass on. Estate planning is the best way to protect everyone you love and everything you own, and working with an estate planning lawyer is the best way to do estate planning.
However, many people avoid hiring an estate planning lawyer to help them because they think that the costs of legal fees will outweigh the benefits of legal guidance. They either forego estate planning entirely or attempt to take a “DIY” approach, using information and downloadable templates they find online to create a self-made plan.
If you haven’t made your estate plan yet, and you think that enlisting the assistance of an attorney will be too expensive for you, what you may not realize is that, actually, a Texas estate planning lawyer can save you money – potentially, tens of thousands or even hundreds of thousands of dollars – by organizing your affairs ahead of time.
Here are three ways that letting a knowledgeable estate planning attorney draft your legal documents will help you save on court costs and other fees in the long run:
1. A Texas Estate Planning Lawyer Can Save You Money By Preventing Probate From Being Necessary
If you don’t have a comprehensive estate plan in place or don’t take other measures to prepare for when you pass away, your estate – all of the assets that you own – will have to go through probate. Probate is a Texas court process that determines how your assets will be distributed, pays your outstanding debts and taxes, and more (either according to the terms of the will, after it is validated, or according to the state’s intestate laws). A will alone will not prevent probate.
The probate process is notorious for being time-consuming, stressful, confusing, and expensive. There are various court fees that your family will have to pay. They may have to pay for the assets to be formally appraised; they may have to pay to send formal notices to creditors and beneficiaries; they will likely have to pay for a lawyer who understands probate and who can help them avoid making mistakes during the process that can lead to additional fees or prolong a resolution (probate in Texas can take anywhere from six months to two years or longer). In most cases, the money used to pay for probate-related expenses comes out of the inheritance, and not out of your family’s own pockets, but this isn’t exactly reassuring. It means that the money you worked hard to leave behind to your loved one’s will essentially be wasted, and it won’t go to them.
A Texas estate planning lawyer can save you money by ensuring that your estate won’t have to go through probate when you pass – that your assets will be preserved and transferred to your family directly, without incurring any probate fees.
They can avoid probate by setting up….
- A Revocable Living Trust
A revocable trust is a fiduciary entity that owns your assets, manages them during your lifetime, and immediately distributes them to your beneficiaries and heirs when you pass away. Revocable trusts are flexible; you can alter the details about who gets what or how the trust is managed at any point in your life. These types of trusts help protect your family’s privacy and yours, and they won’t have to pass through probate. They can be extremely complicated to establish correctly without an estate planning attorney’s help.
- Joint Ownership (with Rights of Survivorship)
Only property that is owned in one person’s name alone will have to go through probate – any property owned jointly with a “right of survivorship” can bypass the process because it will transfer the ownership directly to the living owner after the other owner’s death. An estate planning lawyer can help you discover which of your assets/accounts are eligible for joint ownership and explain what your options are for those assets that may require more complex planning.
- Deed of Transfer on Death
For the assets that do require more complex planning, one option may be a TOD, or transfer-on-death deed! When you establish a TOD, the asset in question immediately transfers to the beneficiary upon death without having to undergo probate. People often use these deeds for real estate, vehicles, brokerage accounts, and qualified securities. You can change the beneficiary of a TOD at any time in your life. An estate planning attorney can explain if a TOD is your best option for the assets in question and (if it is) draft a personalized TOD that will be effective.
2. A Texas Estate Planning Lawyer Can Save You Money By Preventing Mistakes That Can Lead To Family Conflict, Litigation, & Additional Probate Fees
If you don’t have an estate plan in place, your family may fight over what your wishes were. Death can be stressful for families, particularly for blended families or when estranged family members become involved. They may argue over what you would have wanted, and without an attorney-drafted estate plan in place to explicitly state and carry out your wishes, they may need to go to court to resolve the matter. Probate litigation can be extremely expensive; depending on the circumstances, it could deplete your estate or cost your family members out of their own pockets.
If you have an estate plan, but you didn’t work with an attorney to create it, it may be full of mistakes. In order for your estate plan to bypass probate, it has to be compliant with state laws and up-to-date with your family situation and financial circumstances; legal advice and templates you find online may not fit either of those requirements. Wills, trusts, and other estate planning tools are sensitive legal documents. Any errors can render them invalid, which is why it isn’t recommended to attempt estate planning on your own! If you pass away without a valid estate plan, your family will likely have to go through probate, and as we mentioned above, that is an expense you and they would do best to avoid.
A Texas estate planning lawyer can save you money by helping you avoid errors in the estate planning process and personalizing your documents to your unique needs for maximum effectiveness; they can guarantee that when your family needs to use it, it will work as intended.
3. A Texas Estate Planning Lawyer Can Save You Money By Preserving Your & Your Family’s Eligibility For Needs-Based Financial Aid
Estate planning isn’t just for death – it’s also for life. Trusts have many benefits other than transferring assets to beneficiaries upon your passing. Because they own the assets outside of your name, they can also be used to shield your resources from being counted in income-based or resource-based programs, such as Medicaid.
For example, the cost of a nursing home in Texas can be as much as $80,000 a year or more, and that’s not covered by Medicare. Most seniors can’t afford that without having to use up all of the money they planned to leave their children and grandchildren. Medicaid can cover the costs of a nursing home, but there are strict asset requirements, which leaves most of the seniors in the middle class in a tricky situation – they don’t have enough to afford care, but they have “too much” to qualify for aid. They can’t give everything they have to their kids prematurely, as Medicaid will count gifts as resources, and because they will still need to have money available for other expenses other than the pure costs of nursing home care. If they work with an attorney to establish a trust, however, they can move assets out of their name while still retaining control of what happens to those assets (as they control the terms of the trust), which can allow them to qualify for Medicaid.
A Texas estate planning lawyer can save you money by identifying what type of trust you need based on your unique goals and financial circumstances, and then setting up a trust that can help you qualify for aid without having to lose your life savings!
The Law Office of Michelle E. Murphy Can Save You More Than Money. Call Today.
Estate planning with the help of a local lawyer can keep you and your family from having to spend money, but it can also give you and your family something priceless; peace of mind. You can relax and stop worrying about your future financial situation, knowing that your family will be well taken care of even when you are no longer there to provide for them. An attorney-drafted estate plan will allow your family to focus on grieving and moving forward after your passing, instead of having to navigate the financials. Attorney Michelle E. Murphy has spent over 20 years helping Texas families create comprehensive plans that are customized to their needs. Her legal knowledge and experience allows her to draft effective wills, trusts, powers of attorney, health care proxies, advance directives, and other legal documents that can achieve your legal goals and preserve a lasting legacy! Don’t wait – call today to schedule a free consultation and get started.