May is Leave a Legacy month, and there’s no better time to think about your legacy. What do you want to leave behind for your family, friends and community when you’ve passed on?
Attorneys James and Matt Davidson of the Davidson Law Group, a Texas Legal network firm and owners of YourTexasLegacy.com, have spent a lot of time thinking about this essential issue.
“You have to define legacy for yourself. It can be anything that’s valuable,” says James. “Often times people think of money and assets, but ultimately it’s whatever is important to your family, tangible or intangible. Creating or taking intentional steps to ensure that those valuable items are passed down to generations and making sure that there’s a plan in place – that’s estate planning.”
The Davidson brothers sat down with Texas Legal to talk about charitable giving through a will or trust and the importance of estate planning, answering some important questions and giving their valuable advice on the topic.
Why is Estate Planning Important?
James and Matt became estate planning lawyers because they wanted to help other people avoid a tragic situation that happened in their own family
“We saw our grandfather battle with cancer and go through eight years of long term care. In the process, he lost all of his assets. My grandmother is still alive – she’s 97 – and now my mom and siblings are having to pay out of pocket to take care of her,” says Matt. “There were estate planning tools we could have used to protect them and their assets.”
Matt says he’s used to hearing the following phrase from clients: “I don’t have an estate.” But estate planning, he says, isn’t just for the rich.
“I always respond to them saying, ‘Yes, you do.’ The question isn’t whether or not have an estate. The question is who is going to be in control. If you don’t decide, then the state is going to create an estate plan for you, and that plan is often not where people would have wanted things to go.”
How Can I Leave Money to Causes I Care About Through My Estate Plan?
James says leaving money or assets to an organization you care about is an easy and normal part of the estate planning process.
“It’s not difficult at all. It’s just as easy as it would be to write in your normal beneficiaries,” he says. “If you have an existing will or trust, you can make an amendment to include charitable giving.”
And leaving money or assets isn’t just for the rich. Anyone can leave a legacy through giving.
“For a lot of our clients, it’s more about the heart than the actual amount of money. There is a fund that we often use for our charitable giving where the minimum is just $250. A lot of our clients want to give 10 percent of their final estate, whether that’s $100 or $1 million,” says Matt.
The two say that there are strategies to financial giving that can help avoid tax liabilities, something an estate planning lawyer can help you figure out.
It’s not just money either – most any asset can be given to a charitable cause.
“You can leave real estate, valuable personal property, mineral rights, vehicles – there’s a lot of different things. You can basically leave anything,” says Matt. “The only problem is that you can’t always guarantee that they’re not just going to sell it.”
Can’t I Just Trust that My Kids Will Give To Whom I Requested?
Regardless of the amount, the two stress that it’s not enough to hope your kids or beneficiaries will follow your wishes – you need to have it in writing if you want it to get done.
“You don’t ever want to just plan that your kids will do it,” says James. “You need to write it in stone and put it in your plan.”
“It happens a lot where mom and dad when we die, and they say, ‘We trust that you’re going to do the right thing with the money, give it to this person or this charity,'” he says. “They may comply, they may not. There’s nothing to guarantee that they’re going to do it.”
Matt says for a long time, the general attitude about estate planning was, “I’ll just let my kids handle it,” but people are realizing that that isn’t the best idea.
“The idea now is to make it as easy as possible on your kids. When people are grieving, weird emotions pop up. The kids might not get along as well as you thought they might have,” says Matt.
A good plan, he says, leaves nothing to question – which item you want to go to which people, what you want for your burial or your funeral, who you want to be the person to take care of different things, whether you would or wouldn’t want life support in different scenarios. That allows your kids to grieve and process your death without the stress of dividing your estate or making stressful decisions, decisions that may continue to impact your family or their relationships with each other for generations.
What If I Leave It to the State?
Without a will, the state of Texas uses arbitrary formulas to decide how your assets are divided, without any consideration to what you may have wanted. One common situation the brothers find is that of a blended family.
“If you have a husband and wife and each of them has kids from another relationship, the state of Texas says if one of those spouse dies, half of the community estate goes to the spouse and half to their children,” says Matt.
That can cause trouble, especially for the surviving spouse.
“Most of the time, that person would have wanted everything to go to their spouse. But a lot of times, that puts us in the situation where we’re doing mediation between adult children and the spouse, having to negotiate for spouse to keep full ownership of their family home,” says Matt. “It can all be remedied by just doing a simple estate plan ahead of time.”
Matt says it’s their job as estate planning lawyers just to think about how things are now, but how things might be in the future and plan for them, just in case.
“What if you pass away and then your spouse remarries? How can you protect everything that you spouse and built and guarantee that it’s going to go to your kids the way that you intended? What if your kids aren’t good with money? What if your kids are too young to handle money? If you don’t like your children’s spouses, how can you make sure they don’t step in? What if your children are going through a divorce or bankruptcy when they inherit?” says Matt. “It’s our job to think about things that normal people don’t think about.”
How Can I Save Money on My Estate Plan?
You might not think you need an estate plan, and you might think you can’t afford one. But with a Texas Legal membership, a full estate plan is part of every policy, as well as a yearly update so you can keep things current. That’s why the Davidson brothers are Texas Legal attorneys – they truly want every person to be able to afford good estate planning.
“Good estate planning is really expensive,” says Matt. “Texas Legal is a good way for people to afford something they might not otherwise be able to afford.”
If you still need or want to update your estate plan, or want to add charitable giving your will or trust, use our online Attorney Finder today to find a qualified attorney in your area who can answer your questions and help you create the legacy you want to leave behind for those you love.