We often make the mistake of thinking that estate planning is for someone else. Someone with more money, someone older, someone with more children, or someone with a more complicated family situation.

The truth is that estate planning is for everyone, and all Texas residents should take the time to consider what they want to have happen to their belongings and other assets when they pass away. Young people in particular often believe that estate planning is not for them, forgetting that they should plan for their pets, their retirement accounts, their cars, homes, and collectible items, even if this things hold little monetary value.

Another important element to estate planning for young people is healthcare planning. No one wants to think about what will happen after a car accident or other incident leaves them incapacitated, but for unmarried young adults, this is a crucial matter to consider. Without designating a friend, parent, or signficant other to make healthcare decisions, no one will have access to medical records or be able to discuss the next steps with doctors.

For these and other sensitive issues, it is important to understand the exact legal implications of filing out a particular form or completing certain documents. For example, HIPPA forms allow access to medical records, but do not provide for someone to make decisions in the event that the patient is unable to make them. As such, it is important to also designate someone as a healthcare proxy, which requires a different set of paperwork and different formalities.

Source:ABC News, “Even young adults should start estate planning,” Sheyna Steiner, May 6, 2013.

With the estate and gift tax stabilized at $5.25 million for individuals, Texas readers might think that estate planning is only for the very rich. However, the reality is that tax planning and gift planning is only one portion of the full estate planning picture, and that there are many other elements that are important to consider.

For example, people at every income level who have children need to take the time to choose and designate a guardian in the event that they die or are otherwise unable to care for their kids. This is a truly unpleasant thing to think about, but it is even concerning to avoid planning for it and to leave relatives or the state with the responsibility of choosing a guardian.

Another important thing to consider is will revisions. Often once we’ve drafted a will we believe that the job is done and we can stop thinking about it. However, with family members getting married or divorced, having more children or changing careers, the original plan for disbursing assets may not suit the new situation.

There is also the matter of changing estate tax laws. While the current exemption has stabilized for the foreseeable future, Congress could choose to alter it or enact additional laws that modify estate planning and tax liabilities considerably. When that happens, it is crucial to take another look at the previously made plan and making sure it still works given the new laws.

Acquiring new property or opening a new investment or retirement account can also impact estate planning. Many people don’t realize this, but if a will instructs the executor to give all investments to your only child, but the investment account lists your spouse as the beneficiary, the money will go to the spouse when the beneficiary designation form overrides the will. Revisiting these issues to iron out conflicting choices can help simplify the process in the long run and avoid conflict.

Source: New York Times, “Estate Planning Remains a Moving Target Under the New Tax Law,” Paul Sullivan, April 26, 2013.

A major element of estate planning, along with planning for financial assets, is planning for the distribution of personal items. From art collections to antique tea sets, many Texas families have amassed significant collections of personal items that have both monetary and sentimental value. However, younger generations are increasingly turning these items down or eventually selling them, citing a lack of space or disinterest in the items themselves.

The problem of orphaned heirlooms also grows out of changing tastes and changing lifestyles. Where it was once expected and perfectly reasonable to have a basement or attic filled with family artifacts, smaller homes and more modest lifestyles have caused people to have to prioritize between saving things and saving money and space. The economic recession has also lead to an increased need for mobility among working-aged people who may have to move to another city or state to find work and cannot continually transport valuables like grandma’s china or antique military swords.

The change is also generational in many ways. Grandparents who are passing down their belongings now came from the Great Depression generation, where it would be unthinkable to discard a perfectly good piece of furniture or divest of items that held value. Not only have items like furniture become less expensive, but less emotional emphasis is placed on having the right sorts of things.

Figuring out what to do with all of these items is very important both to preserve essential parts of a family legacy and in terms of creating a realistic estate plan. In some cases, grandparents or parents may not want to admit that their family would discard their beloved crystal animal collection, but know deep down that it is not practical to keep. This is where estate planning can help facilitate practical discussions and come to an agreement while the owner of the belongings is still around.

Source: The Star Tribune, “No longer saved for generations, family heirlooms are being shed” Kim Palmer, April 22, 2013

Information about estate planning for Texas families can be found on our website.

Many tech-savvy Texans don’t realize the problems of the digital domain when it comes to estate planning. Along with the tangled web of cryptic passwords that many of us keep only in our head or on a piece of scratch paper, we also do not frequently consider what happens to the things that we own in the digital space after we are gone. For example, the user agreement from Apple’s popular iTunes store extends only a lifetime license to users who “purchase” songs, television episodes, or movies from them.

This means that when their life ends, so does the right to use that content, which means that the hundreds of hours of music and movies that many of us have amassed over the years are not property in the same sense as a DVD or a record would have been and we cannot pass them on to our children or grandchildren.

Along with our digital purchases, there is also the tricky matter of all of that private correspondence and other information that we store on the web. From photos to short videos to saved emails, computer users today make those large boxes of pictures that grandparents left behind look tiny in comparison to our lasting records.

Enter Google’s new feature, which gives users an opportunity to say what stays, what goes, and what other people can have access to. The feature works by monitoring account inactivity and then disposing of data according to the user’s preference after a designated time period. The company acknowledges that this is an estate planning tool, referring to it as a management system for your “digital afterlife”.

What do you think – would you use a feature like this?

Source: The Wall Street Journal, “Google Lets Users Plan ‘Digital Afterlife’ By Naming Heirs,” Geoffrey A. Fowler, April 11, 2013

More information about estate planning in Texas is available on our El Paso estate planning page.