Estate planning may seem like a straightforward process. For many, all they may think of is drafting their last will and testament or deciding what will happen with their estate. However, there are many different elements to keep in mind when you plan on starting your estate plan. James H. Horton Law Firm, P.C. is here to help define the important terms that you need to know.
What is intestate? Simply put, this means that an individual has passed without a will or any other estate planning documents in place. Without these documents, it is extremely difficult to successfully and adequately distribute an estate. What happens when an individual dies intestate? Ultimately, the courts will determine who is eligible to inherit your estate. You lose the ability to control who you wish to name as an heir.
Beneficiaries are extremely important to the estate planning process. A beneficiary is an individual or even an institution or charitable organization, that you name to benefit from your estate. You can either designate a portion or all of your estate to an individual or organization, depending on what you think is best for your unique situation. It is vital to have beneficiaries in place because, without them, the process of distributing your estate will end up in court.
A decedent refers to an individual that has passed away. When this term is utilized in estate planning, it typically refers to the individual that has passed away who wrote the will. This term is useful when discussions regarding the will or estate plan take place.
As time goes on, it may become necessary for an individual to make adjustments to their will. It is important for someone to revisit their estate planning documents regularly, so they can ensure accuracy. A codicil is essentially an amendment or change that someone makes to their will. It is possible for someone to modify or even revoke aspects of these documents entirely. Whenever a major life event occurs, it is important to review these documents and determine if a codicil is necessary.
When an individual passes away, what steps take place? Well, their will must go through a legal process known as probate. This makes sure that the will and other documents are handled appropriately. For example, ensuring beneficiaries receive their intended portion of the estate. There is potential for probate to become a stressful and costly process, specifically when there are no estate planning documents in place.
Trusts are another type of document relevant to the estate planning process. This document contains three important parties: the trustor, trustee, and beneficiaries. The trustor is the individual that creates the document, the trustee is responsible for the administration of the document, and the beneficiaries assume ownership of the properties delegated by the trust.
A will is what many people first think of when they consider estate planning. This document allows you to explicitly state what you want to take place with your belongings. You can also name individuals to assume guardianship of your children, or even delegate a caretaker for your pets. A will is perhaps the most important estate planning document to have in place and should be what you start with while estate planning.
8. Joint Tenancy
When someone plans out their estate, they may be doing so with a spouse or life partner. If they have purchased property together, they will have to delegate this as a joint tenancy. When individuals co-own a property, they can rely on what is known as the “right of survivorship.” If their partner passes away, they can automatically assume full property ownership.
Any Questions About Estate Planning in Texas?
This list of estate planning terms provides a great starting point for individuals wishing to start the process. However, if you have questions or concerns, it is always best to consult experienced attorneys. The team at James H. Horton Law Firm, P.C. is prepared to help.