Estate Planning in Texas: Why a Will Isn't Always Enough

Many people feel done once they sign a will. But a will does not control everything you own. Some of your most valuable accounts are decided by a form you may have filled out years ago.

Key takeaways

• A will generally goes through probate, which is the court process for settling an estate
• Retirement accounts and life insurance usually go to the person named on the beneficiary form
• An old form can override your will
• A Texas attorney should draft or review your legal documents

What a will does and does not do

A will says who gets what you own in your own name. After you pass away, it usually goes through probate. Texas has several ways to handle probate, and some are simpler than others. An estate attorney can explain which fits your situation.

But a will does not control accounts that name a beneficiary. These pass to the named person, outside the will. That includes:

• IRAs and 401(k) plans
• Life insurance
• Annuities
• Accounts with a payable-on-death or transfer-on-death designation

When an old form causes trouble

Here are a few ways this goes wrong:

• A former spouse is still listed.
• A person who has passed away is listed, and no backup was named.
• The form was never completed, so the account goes by the plan's default rules.
• A child is named, but you meant for the money to be split.

Beneficiary forms are easy to forget. Many people find it helpful to check them after a marriage, divorce, birth or death, and every few years.

Other documents to have

A will is only one piece. Many people also look at:

1. A durable power of attorney, so someone you trust can handle money if you cannot.
2. A medical power of attorney and directive, to name who speaks for you on health care.
3. A trust, in some cases, to avoid probate or set rules for how money is used.

Texas does not have a state income tax or a state inheritance tax. Federal estate tax rules apply only to larger estates and change over time. That does not mean planning is not needed. Probate costs, family disagreements and taxes on inherited retirement accounts can all matter.

Where to start

Start with a list: every account, who is named on it, and where your documents are kept. That list alone can show gaps. Our Legacy Stress Test is a free way to look at your plan and see what to ask about.

Sources and references

• Texas Law Help: Wills, probate and estate planning (opens in a new tab)
• IRS: Estate tax (opens in a new tab)

This article is general information, not legal, tax or investment advice for your situation. We do not provide legal advice. Talk with a licensed Texas attorney about your documents.