Why a Will and a Trust Do Not Make a Complete Estate Plan

Horror stories abound of individuals with plenty of assets passing on without a will, throwing their loved ones into chaos and probate drama. You may have heard of these stories and made sure to establish a secure will. You may have even gone a step further and placed some assets into a trust for your heirs so those assets can avoid probate. Unfortunately, a will and a trust do not make a complete estate plan. Here are 5 other things to consider when evaluating the completeness of your estate plan.

Regularly Update Your Documents

First, even a will and a trust won’t do what you want them to if you do not regularly evaluate and update them. Changes to your financial or personal circumstances should prompt an update. For example, a divorce, marriage, death of a spouse or beneficiary, or a loss of a job or large inheritance could all require changes to your estate plans.

Include Health Care Designations

If you have a will and a trust, you still may wish to put specific documents in place that designate your healthcare wishes in the event you become incapacitated. These documents are called advance directives. A medical power of attorney grants a person of your choosing the right to make your medical decisions for you, while a directive to physicians will outline wishes for your care in advance.

Include Beneficiary Designations

Beneficiary designations will often take precedence over what’s in your will or trust, so naming beneficiaries for your most important accounts is important. These accounts include retirement accounts, such as your 401(k), and insurance policies. These designations will not go through probate, so they can often be just as important as getting your will updated and in order. Updating your will and trust should also include a review of your beneficiary designations.

Transfer-on-Death Provisions

Other types of accounts, such as bank and brokerage accounts, can be passed on outside of probate using transfer-on-death provisions. Under these provisions, you retain ultimate control over the account until your death. These are very similar to beneficiary designations and can supersede the terms of your will.

Tax Planning

In addition to specific tools and documents to help close any gaps in your estate plan, you should also carefully consider the impacts of taxes on your estate plan and the ultimate inheritance your heirs and beneficiaries will receive after the probate process. Even if your estate plan was originally carefully considered in light of taxes, annual changes to tax laws should be considered alongside your annual update.

Do You Need a Houston Estate Planning Attorney?

If you only have a will, trust, or some combination of the two, do not fear. A skilled Houston estate planning attorney can help you figure out other estate planning tools that work best for you and your family. The team of Houston-area attorneys at McCulloch Miller, PLLC are here to help you with all of your estate planning needs. Contact our office at 713-936-9073 to schedule a free initial consultation with an attorney on our team.

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