What Estate Planning Really Means 

Estate Planning is a term that is sometimes misinterpreted. However, the true meaning of the term involves a comprehensive effort to examine the assets owned by an individual or married couple, consider their objectives for dividing assets at death, and minimize the taxes paid as a result of either one or both of them.

Is Estate Planning the Same as a Will?

Estate Planning is more than just drafting a Will with the assistance of an estate planning attorney. Rather, it integrates three separate considerations:

  • The type of assets
  • Personal desires regarding division of the assets
  • Tax considerations

All three must be considered to ensure that an individual or married couple's desires are effectively accomplished at death.

Estate Planning Tools

While estate planning in Texas has traditionally involved a well-drafted Will to lay out someone's desires for their estates, it also involves the use of various trustsannual gifting programs, and family limited partnerships as tools for estate planning. Experienced estate planning attorneys guide clients in the use of these tools for creating a comprehensive, effective estate plan.

Texas Estate Planning Guide with Tools to Consider

Through this website, Ford + Bergner attorneys provide a Texas estate planning guide filled with in-depth information on tools to consider when forming your estate plan. Following is a brief discussion of the topics we have covered:

  1. Estate and Gift Taxes

    In many cases, tax considerations drive much of the estate planning process. Many clients feel strongly that the money they have worked hard to accumulate during their lifetimes should go to their children or descendants, rather than being paid to the government as taxes.

    Estate and Gift Taxes are taxes imposed on the transfer of wealth from one generation to another, either during life or at death.

    Please review more in-depth information on both the Estate Tax and the Gift Tax. Information includes a discussion of the Annual Gifting Program, which can be an effective Estate Planning tool.

  2. Family Limited Partnerships
    A family limited partnership is a fairly complex estate planning tool which involves the members of a family creating a business entity to hold and manage the assets owned by the family.

    In combination with the joint management of the assets, the older generations of the family will generally give away part of their share of the business over time, which allows them the opportunity to make larger tax-free gifts for purposes of the gift tax.

  3. Non-Probate Transfers
    In recent years, the proliferation of non-probate transfers has complicated traditional estate planning. These transfers refer to:
    • Life Insurance
    • Retirement Plans
    • Joint Tenancy Accounts
    • Payable on Death Accounts

    The money from each of these vehicles is paid out to a beneficiary upon the owner's death pursuant to the provisions of a beneficiary designation card. Because these assets pass according to that beneficiary designation, they pass completely outside of the parameters of the Will.

    Many times, these transfers can have unintended consequences and should be carefully coordinated with the Will and other assets.

  4. Traditional Estate Planning v. Revocable Trust Planning
    In recent years, Texas has seen somewhat of a battle between traditional estate planning methods and those methods that would favor the use of a Revocable Trust as the mechanism for controlling the distribution of someone's estate at the time of death.

    Please review more in-depth information behind each of these two methods, Traditional Estate Planning and Revocable Trust Planning, which highlights the similarities and differences between them.

  5. Coordinating the Estate Plan
    Coordination of the various estate planning tools being used in someone's estate and the various types of assets owned in the estate is extremely important. Because one of the fundamental goals of estate planning is the desire to minimize estate taxes, the coordination of the tax-savings provisions with the various distribution provisions and types of assets can have a significant impact on the effectiveness of the elements of a person's estate plan.

In addition to the topics covered in this Texas Estate Planning Guide, it is important to note that proper estate planning also includes:

  • Powers of Attorney for Finances and Healthcare
  • May also include a Living Will giving your doctor instructions in the event you need life support

Powers of attorney are used to allow you to designate another person or persons to make medical and financial decisions for you if you are alive but unable to make those decisions for yourself.

Although the powers of attorney cease to be effective once someone dies, they are critical to have in place if something happens causing incapacity prior to death.

As discussed more completely in our Guardianship Information Center, the failure to have proper powers of attorney in place when someone becomes incapacitated means that the Probate Court must step in and appoint someone to serve as the Guardian and make decisions for the incapacitated person.

The guardianship process is very expensive and difficult to navigate. That expense and difficulty can be avoided with simple powers of attorney.

Contact an Estate Planning Attorney in Texas

If you would like to discuss your estate planning needs with an experienced attorney, we invite you to contact Ford + Bergner. Through offices in Houston, Dallas and Austin, our Texas estate planning attorneys assist clients throughout the state and will welcome the opportunity to help you.