The Importance of Proper Storage for Estate Planning Documents
When it comes to estate planning, having the right documents in place is only part of the equation. Equally important is ensuring that these documents are properly stored and easily accessible when needed. Estate planning documents, such as wills, trusts, powers of attorney, and healthcare directives, represent your final wishes and can provide significant peace of mind to both you and your loved ones. Without proper storage, these documents could be lost, damaged, or inaccessible when the time comes to use them. Why Proper Storage Matters Estate planning documents serve as legal instructions for the distribution of your assets, guardianship of minor children, and decisions regarding medical care should you be unable to make them yourself. If these documents are not stored securely, there’s a risk that they could be tampered with, misplaced, or inadvertently destroyed. In the event of an emergency, ensuring these documents are accessible to trusted individuals is vital. Types of Estate Planning Documents Common estate planning documents include: Will: A legal document outlining how your assets will be distributed after your death. Trusts: A legal structure that comes into effect during your life and holds and distributes your assets according to your wishes. Power of
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What is a Small Estate Affidavit?
Dealing with the loss of a loved one can be overwhelming, especially when it comes to managing their estate. In Texas, a small estate affidavit offers a simplified way to transfer assets without going through a full probate process. This option is particularly useful for families handling smaller estates, helping to save both time and money. What Is a Small Estate Affidavit? A Small Estate Affidavit is a legal document that allows heirs to collect and distribute the assets of a deceased person without going to court. In Texas, this process is available only under specific circumstances and is governed by the Texas Estates Code. It’s an efficient alternative for estates that meet certain requirements, particularly when the value of the estate is modest. Requirements for Using a Small Estate Affidavit in Texas The Estate’s Value Must Be Small The total value of the estate, excluding the homestead and exempt property, must not exceed $75,000. This limit ensures that the affidavit is used only for smaller estates. No Will A Small Estate Affidavit can only be used if the deceased did not leave a valid will. Assets Qualify for Simplified Transfer The affidavit is primarily used to transfer assets
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Do I Have to Pay Estate Taxes When I Die?
Estate taxes can be a significant concern when planning for the future, and many individuals want to know whether their estate will be subject to taxes when they pass away. For residents of Texas, the good news is that the state itself does not impose an estate tax. However, federal estate tax laws may still apply depending on the size of the estate. Texas and Estate Taxes In Texas, there is no state estate tax, sometimes referred to as a “death tax.” This means that if you are a Texas resident, your estate will not owe any taxes to the state upon your death. This is advantageous for Texans, as some states impose their own estate or inheritance taxes, which can reduce the amount of assets passed on to heirs. The absence of a state-level estate tax simplifies the estate planning process and often allows for more flexibility in passing on wealth to future generations. Federal Estate Taxes While Texas does not have its own estate tax, estates may still be subject to federal estate taxes. The federal estate tax exemption for 2024 is $13.61 million per individual. This means that if the total value of your estate is
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IRS Announces 2024 Tax Adjustments: What You Need to Know for Your Estate Planning
On November 9, 2023, the Internal Revenue Service (IRS) took a crucial step in keeping pace with the relentless march of inflation by issuing Revenue Procedure 2023-34. This directive provides the annual inflation adjustments for various tax provisions, offering valuable insights for individual taxpayers planning their financial strategies for the upcoming tax year. In this article we discuss the key highlights of these adjustments and their implications for estate planning in 2024. Estate, Gift, and Generation-Skipping Transfer Tax Exemption One of the headline changes is the adjustment to the estate, gift, and generation-skipping transfer tax exemption amount for the year 2024. The new figure stands at $13,610,000, representing a significant increase from the previous year’s $12,920,000. This adjustment has crucial implications for individuals planning the transfer of assets, as it means they can now shield an additional $690,000 ($1,380,000 for married couples) from transfer tax liability compared to 2023. Annual Exclusion for Gifts The IRS has raised the annual exclusion for gifts in the calendar year 2024 to $18,000. This is an increase from the 2023 exclusion amount of $17,000. Gifts to Non-Citizen Spouses Another noteworthy adjustment involves gifts to spouses who are not citizens of the United States.
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The Role of a Prenup in Estate Planning
Integrating a Prenuptial Agreement into Your Comprehensive Estate Plan: A Guide for Houston, Texas Couples Estate planning is an essential process for anyone looking to secure their assets and protect their loved ones. One often overlooked aspect of estate planning is the prenuptial agreement, which is an invaluable tool for protecting individual assets and ensuring a smooth distribution of assets in the event of a divorce or separation. In this blog post, we will discuss the importance of incorporating a prenuptial agreement into your comprehensive estate plan and how it can benefit you and your family. Remember, we are always here to help you navigate this process. The Role of Prenuptial Agreements in Estate Planning A prenuptial agreement is a legally binding contract between two individuals before they get married. There is no expiration date on a prenuptial agreement. This agreement can address various financial and personal issues that couples may not agree on, including asset protection, debt management, and inheritance rights. If you do not already have a prenuptial agreement, Including one in your estate planning process helps ensure that your assets and family are well-protected. Protecting Inheritance Rights for Children from Previous Relationships A prenuptial agreement can
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How to Set Up Legacy Contacts
When creating estate plans digital assets- such as Gmail accounts and Facebook- are often overlooked. For many, however, controlling what happens to these assets is a critical component of organizing their affairs. Here are the processes for making sure the right people can access your accounts upon your passing. If you missed our previous blog on other examples of digital assets and why they are important to include in your estate plan, you can read it here. How to Set Up Google If you utilize Google products such as Gmail or Google Drive, you will need to visit the Inactive Account Manager. The first step you will take is selecting an interval of inactivity. The interval of inactivity means how long it has been since you were last active on your Google account and once that time frame has been matched, Google will automatically delete your data. You can set your interval of inactivity for as short as three months to as long as 18 months. The interval of inactivity period means that you have been signed out of Google on your computer, laptop or other devices for the specified time period. Instead of setting up Google to automatically
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6 Incredibly Famous People Who Died Without a Will
We all know we need to get a will, but for many of us it feels like we will have more time to get around to it. When someone in the United States dies without a will, they are considered to have died “intestate.” Rather than choose what happens to their estate, the governing law on inheritance distribution will wind up controlling who gets what and when. Here is a list of five of the most famous people in this country who never got around to getting a will. Abraham Lincoln One of the most famous men to have ever lived in America, Abraham Lincoln was the nation’s 16th president. As many know, he was assassinated on April 15, 1865 by John Wilkes Booth, a Confederate sympathizer. Lincoln was killed at Ford’s Theatre in Washington, D.C., less than a week after Robert E. Lee surrendered. Despite being a lawyer himself, Abraham Lincoln died without a will. So what happened to his estate? Records state that Lincoln’s estate was divided between his widow and surviving children. Luckily for the family, Congress donated money to Lincoln’s widow, and a justice of the Supreme Court stepped in to serve as the executor
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Top 10 Worries for Clients
Sitting on my side of the conference table (or zoom camera, as it is more often than not), I hear a lot about the innerworkings of my clients’ families, finances and personal lives. Through all the stories of family conflict and loss I’ve heard, there are a few common concerns my estate planning clients come to me with. For today’s blog post, I thought I’d share a few of the worries I hear the most often from my clients. Whether any of these topics weigh on your mind or not, my goal is to remind you that you should feel comfortable sharing the good, bad and ugly in your life with your estate planning attorney. If the attorney preparing your will or trust does not know what weighs on your mind, it is a lot harder for him or her to create a plan that fully addresses your concerns. In no particular order, the top worries my clients come to me with are as follows… Will my child’s inheritance be protected from my child’s (current or future) spouse? Whether my client has minor children or children that are adults with a family of their own, a lot of people
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Estate Planning for Blended Families
According to the Pew Research Center, two-parent married households are declining while rates for divorce, remarriage and cohabitation are growing. Today, 40% of births occur to women who are not married, and less than half of kids are living with two parents who are both in their first marriage. At the Heights Law Group, we work with a lot of blended families. By “blended families,” we mean clients that are married, but have children from a prior marriage or relationship. Estate planning with blended families is not one size fits all. As such, we wanted to dedicate today’s blog to examining more about the unique challenges faced when drafting wills and trusts for blended families. Blended families require a different approach Take a “traditional” family, with two married parents who are on their first marriage and have children from that marriage. When the first spouse dies, most couples are confident that the surviving spouse will make it a priority to provide for their children. This makes sense- the children are just as much the children of the surviving spouse as they are of the spouse who is deceased. The financial obligations for the couple’s children will now rest solely
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Planning for Your Digital Legacy
An estate plan often focuses on tangible property such as jewelry, artwork, money, and vehicles. However, in this age of technology, it is important to remember to include your digital assets. Digital assets consist of everything we own online. Because we spend more time on computers and smartphones than we ever did before, you may not realize how much digital stuff you own, from photos and videos to online accounts, cryptocurrency, and nonfungible tokens (NFTs). Why Is It Important to Plan for Digital Assets? Planning for digital assets is important for several reasons. First, without a plan, digital assets may get lost in the Internet ether and not pass to your loved ones after your death due to the simple fact that their existence is unknown. Second, planning now means your family will not have to worry about hunting for these items upon your death while also grieving a beloved family member. Third, like most adults (roughly 70 percent of them), you want certain aspects of your digital life to remain private. If you do not create a plan, your loved ones may learn things that you wish to keep secret. Finally, planning now can minimize the risk of
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