Estate Planning for Average People

The following is provided for informational purposes only and is not, nor should it be construed as legal advice.

In my practice, I find that many people are “turned off” by the term “estate planning”. In trying to determine why so many persons find the term “estate planning” offensive or unnecessary, this writer has come to the conclusion that general information about estate planning gets unnecessarily confused with financial planning (also an important tool but an entirely different type of animal).

I have had the opportunity to attend many seminars or other meetings (with and without the obligatory complimentary meal), that were designed to persuade the audience to sign up for a particular estate product or plan that was being sold.

What most of these meetings usually failed to do is to address the planning needs of the common, ordinary, average working man or woman. These seminars, in my experience, are aimed at the moderately wealthy or wealthy client. Those persons certainly need estate planning, but so do those people who identify with the normal “Joe or Sally Wage Earner”.

This firm deals with many children of deceased parents who, unfortunately, are caught in an uncomfortable position. That discomfort was caused by their parent(s) believing that their estate was too small or too insignificant to require at least some basic estate planning. A number of people have erroneously declared that they, “. . . do not need estate planning because they do not have an estate.” That is a wrong statement.

Everyone has an estate; it is just that some are smaller than others. If one person’s estate is smaller than another person’s that does not change the fact that each needs a plan of distribution after death.

Estate planning for the average working person should consist, at minimum, of a Will that determines how property is to be divided upon their death. Unless there is at least a basic simple Will to divide property upon death, the property will be divided as dictated by the laws of intestate succession. Many people decide that that’s okay because, in many cases, that’s what they would have put in their Will, if they had a Will. What those people do not realize is that their heirs will still be faced with a probate procedure. That procedure will not only be dictated by the state of Texas instead of them but also will place a greater financial burden on their children than if they had a Will.

An example of how even a modest estate needs a Will can be demonstrated by “Joe and Sally wage earner”.

  • Joe and Sally worked hard all their lives and reared three children, Tom, Dick and Harry.
  • Tom and Dick each survived their parents, but Harry died at age 30 with two children, Crystal and Penelope. Crystal and Penelope moved to Chicago with their mother and haven’t been heard from in the last 45 years
  • Joe retired at 65 from a manufacturing job. Sally retired at 62 from her job as a bookkeeper.
  • Joe and Sally died very close to the same time when they were 90 and 95 respectively.
  • They owned a modest home which has been paid for as well as a couple of six-year-old cars. The total value of the home and cars together is approximately $110,000.
  • They live on Social Security and have been able to establish a small savings account (about $10,000) for any emergencies that might arise.
  • During their declining years, Tom took care of his parents, carried them to doctor visits and generally helped out.

Based upon the above fact scenario and relying upon the laws of intestate succession, the distribution of their estate after payment of all expenses would be: one third to Tom, one third to Dick and one sixth to both Penelope and Crystal.

Even if this distribution is what Joe and Sally would have wished (which it probably is not), the cost of settling Joe and Sally’s estate is estimated to be about three times what the cost would have been if they had probated Wills. Not only would the raw probate cost more, the cost would be further increased by a court-appointed attorney ad litem (an attorney which must be appointed by the court to locate any unknown heirs together with Crystal and Penelope).

All of these extra expenses could have been avoided if Joe and Sally had chosen to have even a simple Will.

Distribution of the estate of Joe and Sally is less dependent upon the size of the estate and more dependent upon the planning that has been done.

Please don’t fall into that trap of believing that your estate does not need a Will. The relatively small number of dollars needed to prepare a Will becomes insignificant as compared to the cost of settling your estate through probate without a Will.

Harris and Montgomery counties in Texas have an abundant number of capable attorneys to assist you with your need for a Will. You are encouraged to find an attorney of your choice to draft a Will so that your estate has a plan.

James Bright has been admitted to practice before the Federal Courts for the Southern District of Texas and Eastern District of Texas as well as all of the Justice Courts, Probate Courts, County Courts at Law, District Courts, Courts of Appeal and Supreme Court for the State of Texas. He maintains an office in Houston and by appointment another at 208 McCown Street in the heart of historic Montgomery. Contact may be made by telephone (936) 449-4455 or (281) 586-8277. For more information about wills or probate in Texas, please see- www.houstontxprobate.com

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JAMES M. BRIGHT

14340 TORREY CHASE BLVD., Suite 150

Houston, TX 77014

Email: topics@houstontxprobate.com