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Texas wills and trusts aren't just about taxes

Many people in Texas may be under the impression that the reason for an estate plan is to reduce or eliminate estate taxes. Those who are of that school of thought may feel free to ignore the need for wills and other estate planning documents since the estate tax exemption is over $5 million per person now. However, there are numerous other reasons to have an estate plan, and with the attention taken off of taxes, those reasons can become the focus.

Without a will, the state of Texas will be the one deciding who inherits a person's estate. There are many times that the individual who the state believes should be the beneficiary of an estate isn't in line with who the deceased person would have chosen. For that reason alone, an estate plan is crucial.

Then there is the question of how the estate is to be divided if someone wants more than one person to benefit from his or her estate. A will gives a person the chance to designate who receives what assets. For instance, a person may want to make specific bequests of certain property to different individuals. People can be as specific as they wish in their wills about who receives what piece of property. Anything from a single piece of jewelery to houses can be outlined in a will.

Some people may need to have trusts for various reasons that have nothing to do with taxes. For instance, there could be someone that the person making the trust does not believe would be ready to handle an inheritance due to age or some other criteria. A trust can make sure that person will not directly receive the inheritance until or unless certain things happen, such as reaching the age of majority.

Wills and other estate planning documents can also deal with issues such as state taxes, debt repayment, gifts to charity, life insurance and several other things that have nothing to do with taxes. An estate plan can also spare a person's family from a costly and lengthy probate process. Therefore, even though federal estate taxes may not be an issue, estate planning is still a valuable process.

Source: investingdaily.com, The New Focus of Estate Planning, Bob Carlson, Aug. 23, 2013

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