When you have people in your life that you love and you care about, one of the most important things you can do is take steps today to help prepare your estate for that time when you will no longer be able to make decisions for yourself or when you pass.
My guest here today is Mary Glenn. Mary Glenn is an estate planning attorney who has been helping families make those preparations since 2008. We’re very lucky to have her as a guest and also to have her as a member of Hargrave Family Law. She’s here today to talk with us about the essential things you must do to help prepare your family for that time that will come eventually. It’s inevitable.
Mary, thank you so much for taking time to be with us today.
Thank you for having me.
When you and I first sat down to talk – I want you to share – tell us how you started to do estate planning.
I started my law career in mostly real estate working with a lot of title companies. I was reading a lot of wills, because you do that when property is exchanging hands. There’s a lot of wills to be read. I always enjoyed it.
Then there was a time when I had a change in my path. I had my first kiddo. I decided, “Oh, well, we need that.” My husband’s an attorney, too. We thought, “Oh, yes. We need to have a will.” I wrote our will. It’s funny. It’s still the same will that we have today.
I started thinking, “Well, other people need this, too.” Friends reached out. They thought, “Well, I need that, too.” Everybody I knew was having a baby. It’s an important thing to have especially with kids.
It really is. I think it’s easy for people to put it off, because it can feel a little overwhelming. One of our goals today is to break down the process and really help people understand what are the documents that they need to have in place? What are the decisions that need to be made when preparing those documents?
First of all, let’s talk about what happens when you don’t have any documents in place, when you don’t have a will or powers of attorney.
Sure. Sure. Obviously, many people don’t have a will. That is a thing that happens. Texas has laws in place to take care of those people. If you die without having a will, your unique circumstances and your family dynamics are not taken into account. The Texas legislature has come up with a plan for you.
Sometimes that’s fine. If you have just a very tiny little estate and a tiny little family, you have maybe 1 child or 1 husband or wife, that can be okay.
But for the most part, we all have a myriad of people in our lives. Sometimes you have blended families. The Texas legislature just really has it very simply laid out. It doesn’t take into account any of your complications of your real life.
Really, the estate planning process is the time to also clarify values, whatever values, whatever maybe charitable organizations you wanted to help and provide assets for. None of that gets taken into consideration.
No. Certainly, too, if you are not married or if you’re just cohabitating, the Texas legislature or the state laws are not going to cover that situation.
Basically, the way that the intestacy laws work is it flows through just your normal family tree. If you’re single, it goes to your parents and then to your siblings, nieces and nephews. It flows to that direction.
If you don’t have those kinds of people, it keeps trickling down into far away relatives, certainly, just not maybe your friends or your charities or anybody else that you would want to consider leaving your assets and your estate, too.
You used the word intestacy. The laws of intestacy would apply when somebody dies without a will.
With a will as being probably one of the most basic estate planning documents, what is the purpose of the will? What does that help accomplish?
The purpose of your will is certainly just to dispose of your probate assets upon your death. You can list out your specific beneficiaries. Certainly, most people would say that they’re going to their spouses or their children. But you can add in all sorts of things.
You can divide things evenly. You can divide things unevenly. Maybe you have a kid with special needs. They need something extra. Then you also decide who your fiduciaries are, so all the people that you want to be actually managing your estate. If you don’t do that, who knows who’s going to step up and start messing with your stuff. In your will, you can say who you want to be your executor which is the person who manages your estate upon your death.
If you have minor children, you can list the people in your will that you want to be your guardian of your children which is certainly important. You can have alternates to all of these people and stuff. It’s important to make sure that your wishes are known and that you’ve written them down.
We do predominantly a lot of divorce work and a lot of custody work. One of the questions people have is, “How do I make sure my spouse doesn’t get my children,” or the other parent of the children, “doesn’t get our children in death?” You can’t X out a parent in a will.
Right. You can’t X out a parent. I would say a lot of people are concerned with the new spouse, too, and the new spouse’s family and that kind of thing, if there is one or if there’s one in the future. It’s important to list out those people that you want to be as alternatives.
Certainly, if you have a kid and a spouse, that person is going to be the first person in line as a guardian. But what if something happens to them? Or maybe they’re not even gone. They’re not dead, but they’re disabled, or they’re out of the country, or there’s something that makes it necessary to have somebody else in line.
Appointing guardians is something that’s really really important for those minor children. Now, as part of that will, you can also establish something called a testamentary trust, correct?
How does that work?
You can also put in a trust, in any will, that protects your beneficiaries. Say, you have a minor child. You’ve got this guardian set up for them. That person is taking care of them, tucking them in at night, physically taking care of them. But you can also have a trustee established and a trust established for that beneficiary to manage the assets. Because most people don’t want their assets handed over to a minor. It’s not even really allowed.
But you can also make that trust even go longer than minority. Instead of eighteen, the trust could go all the way to thirty 30 or so, so that you have a trustee in place managing the assets for your children, until they’re at the age that you decide that they are ready to do it themselves.