Many individuals in Texas and other states are making the mistake of overlooking their assets simply because they do not think they have any. In reality, estate planning is important for all individuals no matter how few or many assets they have. Even a young child who has a custodial account has an estate. Likewise, a teenage girl who has received a piece of jewelry from her grandmother has an estate.
With an estate plan, a person can effectively pass on something of value to a particular person or organization. Estate plans encompass the accumulation of an estate, along with the estate's conservation and distribution. A solid plan will improve and maintain a person's financial security, as well as that of his or her family.
An estate plan can include a will -- which is the cornerstone of the plan -- as well as a trust, which complements a will. Having an applied understanding of the estate tax system and current law is also important. It is also important to understand the gift tax for donations, as well as the state death tax, which might apply.
If a person in Texas fails to put together an estate plan, the state will end up determining what happens to the person's assets when he or she dies. Unfortunately, the outcome may not be in line with what the person's true wishes would have been. Appropriate legal guidance may help people to complete estate planning in a way that clearly communicates their desires regarding what happens to their assets in the future.
Source: finance.yahoo.com, "Understanding the basics of estate planning", Constance J. Fontaine, July 1, 2016