What comes to mind when you hear the term "estate planning?" 

If you're like many people, you know it has something to do with having a will. You’d also be correct if you said it involves making certain other types of arrangements affecting what happens once your life has ended.

A good estate plan goes further and addresses many aspects of your current situation, as well as how to thrive in the years to come. Consider this definition of estate planning:

Estate planning is the process of caring for yourself, family, and your assets while you are living, and planning for the orderly transfer of assets to other persons and organizations– both during your life and afterwards.

Why do estate planning?

Very few people wake up in the morning and wish they could spend the day working with their attorney to create an ‘estate plan.’ However creating (or updating) a plan is among the most important things you can do. When you do, you can:

  • Ensure the assets you have accumulated over your lifetime go exactly where you want them to go and when. If you don’t have a will or living trust, Texas and other states will impose a distribution plan for you, which may or may not match your wishes.
  • Give directions to be followed in case you become incapacitated and can’t make decisions for yourself. (See BSWH Advance Care Planning Guide)
  • Organize your affairs and designate who will handle them when you are gone.
  • Appoint a guardian for minor-aged children.
  • Provide for any special needs your loved ones may have.
  • Minimize possible estate taxes and probate fees.
  • Specify the type of funeral arrangements you would like.
  • Remember and provide for friends, pets, and organizations you care about, which are never a part of the default state distribution scheme.

By planning, you also make things easier for your family. If something happens to you, it will already be a very difficult time for your family and other loved ones. How wonderful it will be if they know exactly what you want to have happen and have the means at hand to follow your wishes. Consider the planning you do now to be your final future gift to your loved ones.

The Key Elements of an Estate Plan

Related to your final wishes

  • Will. A valid will is generally typewritten, dated, and signed by you as well as two legally competent witnesses. States differ as to the exact requirements for a valid will and whether a handwritten will, with or without witnesses, is valid. In Texas, the probate court oversees administration of a valid will at death to carry out your instructions. The court charges probate fees to administer an estate and the documents and proceedings are public record.  
  • Revocable Living Trust. This replaces the will as the main document disposing of your property. You might hear it referred to as a “living trust” or “RLT.” The trust is created while you are living, and the power to change and even revoke it can be retained. Most often people serve as the trustee for their own revocable living trust. A living trust requires that you actually transfer your property into it for it to be effective. A living trust allows assets to pass to heirs outside of the probate process, potentially saving probate fees, and keeps your affairs private.

Typically, if a living trust is recommended, your estate planning lawyer will also suggest a will as a backup document, to transfer any assets that weren’t included in your trust at the time of your death.

  • Beneficiary Designations. Your will or living trust does not control distribution of assets such as your IRA, commercial annuities, insurance proceeds, and some other assets at death. Your IRA or annuity administrator will distribute these types of assets according to a beneficiary designation form on file with their office.  These are the forms you fill out when you establish IRAs or other types of retirement plans, or purchase a commercial annuity or life insurance policy. This form directs the administrator as to who will receive whatever remains upon your passing. You can also request a beneficiary designation form for bank or investment accounts. Since your will and living trust do not apply to these important assets unless you named your estate as the beneficiary, these beneficiary designations can have a profound impact on how your overall estate is distributed and should be part of any coordinated plan.

Provide for physical or mental incapacity

Financial Matters

  • Power of Attorney (POA) for financial matters. This document grants to someone you trust the ability to act on your behalf for a variety of potential transactions and responsibilities. You decide when the POA will become effective and the extent of the authority granted. A POA is only effective during your lifetime and automatically terminates at your death.

Advanced Care Planning

  • Medical Power of Attorney (MPOA) for health care decisions. This Texas document appoints someone to make decisions for you regarding medical treatment at any time if you are not able to make these decisions for yourself. It allows you to specify who is in charge of making critical treatment decisions and who does not have that authority, if you choose. (See BSWH Advance Care Planning Guide).
  • Directive to Physicians and Family (Living Will). This document describes what health care treatment you want in case of an emergency. You work with your doctor to document your wishes regarding resuscitation and other life sustaining procedures.

Managing and distributing your assets

If you or a family member has been cared for by BSWH, we hope that you will consider arranging a gift to All Saints when you create (or update) your estate plan. We realize that we will never replace family members and other loved ones in your plans, and we wouldn’t want to. Part of your planning process is to consider how much to leave to individual heirs. What remains can be used to fulfill your charitable dreams and desires.

If you would like to support BSWH through your will or living trust, click here for sample bequest wording you can share with your attorney. Or consider a gift by beneficiary designation, also known as a "bequest substitute". It has many of the same advantages as a bequest while being among the most tax-wise ways to give.