Ridge Dickey has been Board Certified since 1981 in Estate Planning and Probate Law, Texas Board of Legal Specialization.
Estate planning includes the preparation of the documents that pass property at death: wills, revocable trusts and irrevocable trusts including irrevocable life insurance trusts. Beneficiary designations for life insurance and retirement plans must be coordinated with the instruments that pass property at death.
The estate planning process should also include executing a durable power of attorney that appoints a trusted person (usually with alternates) to handle your financial affairs if you become incapacitated. The alternative may be an expensive court-supervised guardianship.
A durable power of attorney for health care appoints a trusted person or persons to make health care decisions for you if you are unable to do so.
A living will (Directive to Physicians) is the document that directs that life support be removed if that is all that is keeping someone alive and if that is the person's desire. Or it can also direct that life support not be removed.
The increase in the exemption from federal estate tax has de-emphazied tax considerations in the estate planning process. However, death taxes have not been abolished and should be addressed. Just as important, income tax is a consideration. For example, irrevocable trusts including trusts created in a will (testamentary trusts) are taxed at the highest federal income tax rate on undistributed income over $10,700. And the federal income tax status of a closely held business (proprietorship; partnership; C corporation; S corporation) should be well thought out at startup and reviewed thereafter from time to time
You implement creditor protection, bad marriage and tax planning for your children and other heirs. Your estate should be large enough to justify passing it on in own or more trusts. For example, your will can create separate trusts for each of your children. Under Texas law, if the trust can be drawn to that each child will be trustee of his or her own trust but it will not be subject to claims of creditors. And at least a portion your estate will not be included your children's estates and the estate of more remote descendants for federal estate tax and generation-skipping tax purposes.
Make sure you have a personal umbrella policy in place. The annual premium for a personal umbrella policy may be $200 to $300 per year. Its coverage limits are $1 million or more and protect your estate over and above the limits of your auto and homeowners liability coverage.
If you own an interest in a family or other closely-held business, a buy-sell agreement can provide processes to resolve issues before they arise. A buy-sell agreements describes events that give rise to options or requirements for the sale or acquisition of an owner's interests in the business. The events include among others: divorce; disability; death; termination of active employment; irreconcilable differences among the owners.