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A will is a legal document that allows you to direct the distribution of your property upon death in an economical and efficient manner. Bequests under a Will may pass either directly or in trust to a beneficiary.
A Trust is a legal entity in which legal title and management of property are vested in a Trustee who administers the property for a designated beneficiary.
If you die without a Will, the rules of intestate distribution dictate how your property will be passed. In Texas, your estate will be encumbered with significant additional legal expenses and delays in probate court if you do not have a Will.
There are many tax and non-tax advantages for creating a Trust in your will (Testamentary Trust). Trusts are frequently used for children. A trust can assure the money is used for education and transition the child to having wealth. Special/Supplemental Needs Trusts are a necessity to protect a beneficiary’s eligibility to receive public benefits. Although changes in tax laws have reduced the dependency on a Trust for tax savings, there are still many strategies where a Trust may be used to reduce the Estate Tax.
Probate is the process of submitting your Will to the Probate Court, administering your estate, and distributing your property.
Texas has a simple probate process compared to other states. Frequently, a Will is probated as a muniment of title. Eligibility is limited, but it allows for the Will to act as evidence of title and avoids the appointment of an executor.
An Independent Executor is free to administer your estate with a minimum of court supervision and legal expense. It is a streamlined and simplified probate proceeding. Essentially, an Independent Executor has the duty to settle your estate and distribute your property as designated in your Will.
Estate Planning is the process of ascertaining the appropriate legal vehicle, i.e., Will or Trust for your estate, and what pertinent provisions to insert in such vehicle that will provide the most tax and other benefits to enable you to efficiently manage and pass your property to whom you wish upon your death. In the course of assembling the various requested information, you should decide how you desire your estate to be distributed. Naturally, there are many factors that should be considered when arriving at a comprehensive estate plan, such as Federal Estate and Income Tax consequences; these will differ with each situation.
WILL: A legal instrument, executed in accordance with state laws pertaining to testamentary transfers which pass title of your property pursuant to the terms of the Will to your beneficiaries upon your death.
TESTATOR: A male person who executes a Will.
TESTATRIX: A female person who executes a Will.
LAWS OF DESCENT AND DISTRIBUTION: Statutory provisions which set out the manner in which an estate is distributed when a person dies without leaving a Will.
EXECUTOR: The person named in your Will to administer your estate. The Executor is responsible for paying all of the debts, collecting the debts owed by and owed to the deceased, paying any estate taxes which are owed, representing the estate before the probate court, and seeing that all property is distributed to the proper beneficiary as dictated by the Will, including the transfer of title so that ownership will finally vest. The process which serves to give your Executor the greatest freedom is the insertion in your Will providing that he or she will be an "Independent Executor without bond."
ADMINISTRATOR: A party chosen by the court to administer the estate whenever a person dies without a valid Will, or when for some reason the Executor appointed cannot serve. The Administrator customarily receives a fee for his services, is bonded, and must make application to the court and receive the court's ratification at each step in the process of disbursal of your assets. Naturally, all fees are deducted from the estate.
GUARDIAN: A person appointed to stand in your stead with regard to the raising of your children to their legal majority (presently 18 years) in the event of the death of both spouses. Although a designation of a Guardian in a Will is largely advisory only, the court will examine such party before all others, and if found suitable, is most likely to appoint such person.
TRUSTEE: The Trustee is the person who will manage the trust fund, customarily for the benefit of your children. The Trustee will take your place regarding expenditures for your children. As the name implies, the Trustee should be someone you trust. The Trustee should be familiar with your beneficiary’s needs and have financial theories that closely approximate your own.
In the event that you move to a different state or country, have your Will reviewed by an attorney licensed in that jurisdiction to determine if the Will is valid in such state or country and whether or not probate of the Will may be complicated by the use of an out-of-state Will.
The Will should be reviewed periodically so that it may be kept current. You should revise your Will whenever your personal circumstances change significantly, such as with a birth, death, remarriage or divorce, or if your assets change substantially.
Since the Will is a legal document, it cannot be changed unless formal procedures are complied with. Accordingly, please do not attempt to alter, write on your Will or change your Will yourself. You should call your attorney.
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