04/26/2025
ESTATE PLANNING TOOLS IN TEXAS
Estate planning in Texas involves several tools to manage and transfer your assets according to your wishes, minimize taxes, and avoid probate where possible. Here’s a breakdown of some key estate planning tools used in Texas:
1. Wills
A Last Will and Testament specifies how your property should be distributed after you die.
In Texas, wills must meet specific legal formalities (like being signed and witnessed) to be valid.
Wills typically go through probate — a court-supervised process.
2. Trusts
A revocable living trust can hold your assets during your life and distribute them after death, avoiding probate.
An irrevocable trust can protect assets from creditors and estate taxes but is less flexible.
Special needs trusts are used to provide for disabled beneficiaries without affecting their government benefits.
3. Powers of Attorney
A Durable Power of Attorney lets someone handle your financial matters if you become incapacitated.
A Medical Power of Attorney lets someone make healthcare decisions for you if you can’t.
4. Advance Directives
A Directive to Physicians (living will) states your wishes about life-sustaining treatment if you’re terminally ill or permanently unconscious.
Texas also recognizes Out-of-Hospital Do-Not-Resuscitate Orders (DNR).
5. Beneficiary Designations
Certain assets like life insurance, retirement accounts, and payable-on-death (POD) bank accounts pass outside a will or trust if you name a beneficiary directly.
6. Transfer on Death Deed (TODD)
In Texas, you can sign a Transfer on Death Deed to pass real estate directly to someone upon your death, avoiding probate.
7. Lady Bird Deeds
A Texas-specific tool (also called an enhanced life estate deed) that lets you transfer property at death without probate, while retaining full control during your lifetime.
8. Guardianship Designations
You can name a guardian for your minor children in your will.
You can also pre-designate a guardian for yourself if you later need one due to incapacity.
