Estate planning is an essential step for Texans who want to ensure their legacy is protected and their loved ones are cared for. From the unique challenges of Texas law to the potential pitfalls that come with a changing financial landscape, it’s critical to address estate planning with a focus on what matters most to Texas residents. Here, our Katy, TX probate lawyer who has been with our firm since its founding in 2021 will explore the most common mistakes in estate planning and how they impact Texans in particular.
1. Failing To Keep Your Plan Up-To-Date In Texas
Life in Texas is dynamic because families grow, businesses thrive, and people often move across the state. With major cities like Houston, Dallas, Austin, and San Antonio offering unique lifestyles, these changes can have a significant impact on your estate plan. An outdated plan may not account for new family members, changes in marital status, or even updates to Texas law.
Texas Connection: The state’s independent probate process can be less burdensome than in other states, but an outdated plan can still lead to unnecessary complications or conflicts.
Solution: Texans should review their estate plans every few years or after major life events, ensuring they reflect current family dynamics and state laws.
2. Ignoring Texas-Specific Property Laws
Texas is a community property state, which means that assets acquired during marriage are typically shared equally between spouses. If your estate plan doesn’t account for these laws, it could lead to disputes or unintended distributions.
Solution: Work with an estate planning attorney familiar with Texas community property laws to structure your plan accordingly. This is especially important for married couples and those who own property together.
3. Overlooking Digital Assets In Texas
With Texas being a hub for technology and innovation, many residents have digital assets such as cryptocurrency, online accounts, and intellectual property. Failing to include these in your estate plan can create confusion and leave significant assets unaccounted for.
Solution: Texans should compile a list of their digital assets, including instructions for managing them, and ensure these details are incorporated into their estate plans.
4. Not Considering Healthcare Decisions In Texas
In Texas, a Medical Power of Attorney allows you to appoint someone to make healthcare decisions for you if you become incapacitated. Without this document, loved ones may face difficult choices, potentially leading to conflicts.
Solution: Include a Texas-specific Medical Power of Attorney and a Directive to Physicians (living will) in your estate plan to ensure your medical preferences are respected.
5. Underestimating The Impact Of Federal And Texas Taxes
While Texas doesn’t have a state estate tax, federal estate taxes could still affect larger estates. The federal estate tax exemption in 2025 is $13.99 million per individual, but this amount is set to sunset in 2026, potentially reducing the exemption and increasing tax liability.
Solution: Texans should explore strategies like trusts, gifting, and charitable donations to minimize federal taxes. Texas’s lack of a state estate tax provides an advantage, but federal planning is still essential for larger estates.
6. Choosing The Wrong Executor Or Trustee In Texas
Your executor or trustee will play a vital role in managing your estate. In Texas, they must navigate both state-specific and federal laws, so choosing someone reliable and familiar with Texas’s unique legal environment is crucial.
Solution: Select an executor or trustee who understands Texas probate and trust laws. Discuss the role with them in advance to ensure they’re prepared and willing to serve.
7. Not Planning For Long-Term Care Costs In Texas
Long-term care costs are a concern for many Texans, especially those looking to preserve their estates for future generations. Without a plan, these costs can quickly deplete your savings.
Solution: Consider long-term care insurance or Medicaid planning to address potential expenses. Texas Medicaid rules differ from other states, so working with an attorney who understands Texas-specific requirements is critical.
8. Neglecting To Fund A Living Trust
A living trust can be a powerful tool for Texans who want to avoid probate and keep their financial affairs private. However, many people create trusts but fail to fund them, leaving assets to go through probate.
Solution: Ensure that real estate, bank accounts, and other assets are properly titled in the name of your trust. In Texas, this can streamline the transfer of property and avoid delays.
9. Overcomplicating Or Oversimplifying The Plan
Estate planning can be complex, but overcomplicating your plan may create confusion for your loved ones. Conversely, oversimplifying it might leave gaps, especially with Texas-specific issues like community property and oil or mineral rights.
Solution: Texans should aim for a balanced plan that addresses unique circumstances like family businesses, ranches, or property ownership across different regions of the state.
10. Procrastinating The Estate Planning Process
Texans often lead busy lives, whether it’s managing businesses, enjoying outdoor activities, or participating in the state’s vibrant culture. However, delaying estate planning can leave your loved ones unprotected if the unexpected happens.
Solution: Start the process now, even if you think you don’t have enough assets. A basic will and powers of attorney can provide significant protection and peace of mind for Texas families.
Why Estate Planning Matters For Texans
Texas offers unique opportunities and challenges when it comes to estate planning. From its community property laws to its oil and gas industries, a well-thought-out estate plan can make all the difference for residents of the Lone Star State. Working with an estate planning attorney who understands Texas law is the best way to avoid these pitfalls and ensure your wishes are carried out smoothly.
By addressing these common mistakes, Texans can secure their financial legacy and provide for their loved ones. Estate planning isn’t just about managing money, it’s about protecting what matters most to you and your family. Start today to ensure your future is in good hands. For several years, Stuart Green Law, PLLC has been working on estate plans for families and businesses that protect assets. We are licensed in Texas, Kentucky, Pennsylvania, and South Dakota, so contact us for help today.