Most of us at some time in our lives have been told, by a friend, relative, or professional advisor, that we should get a will. Few have any real idea of exactly why we would want to take the time or spend the money to do so, and therefore few do. Yet compelling reasons exists why someone with children, real estate, or even someone with neither would want to take the time and expense to execute a will and other potentially important documents. The purpose of this article is to explain why, in simple and straightforward terms.

This explanation will flow best by starting with an explanation of what happens to the estate of a deceased person in Texas who has a will at death. That person, through their will, has left evidence of how they wish their estate to be distributed, and will have named an "executor," a person nominated to be in charge of the administration of those wishes. In a process know as an "independent administration," the executor will make a trip to the probate court, to "prove up" the will, accomplished by showing the court the will document and answering some basic questions. They will then receive "letters testamentary" that allow them to manipulate the estate holding so that they may gather the assets of the estate, pay the debts of the estate, and distribute the remainder in the manner detailed in the will. Finally, the executor will make one more trip to the courthouse to file an "inventory" detailing their activities. This is a simplified version of the process, but these are essentially the steps involved. If the estate is complex, the executor can be reasonably compensated by the estate for their time and expenses.

When someone dies without a will, the state of Texas has a will for them. In a process know as "dependent administration," Texas statutes and laws determine how such estates will be distributed. The distributions made by these laws may not be far from what many people choose as distribution in prepared wills. However, there is little flexibility in distribution by these laws. As an example, these statutes would give an equal amount of an estate to a successful and financially secure child as they would to a disabled minor child. A person who took the time to make out a will might wish something a little different. Certain types of real estate and property may be split between surviving spouses and children, which may cause problems, and might not be the way the deceased individual would have chosen in a will. But even more important reasons why someone would want to avoid such a distribution by state law is the costs incurred to the estate in the administrative process and the delays in distributing the estate proceeds to the children and heirs. If you have not left instructions on how you want your estate distributed, and who will administer or supervise that process, the probate court will supervise the process. Each step of the gathering of assets, payment of debts, distribution of remaining assets, and other details of administration of the estate will need to be formally presented to the probate court for the judge's approval. The probate court may need to appoint an attorney to administer the estate, an attorney to mind the interests of "unknown heirs" and make sure no one is overlooked and left out of the distribution, and an attorney to represent the interests of minors in the process who are unable to speak for themselves.

All of these requirements are in place to protect the interest of the deceased individual and their heirs, but you can see that protecting such interests can become an expensive and time consuming process. Many a medium or smaller estate can be chewed up or at least significantly eroded by the failure to make simple estate plans. You may see the logical error that many people fall into when they claim that their estate is "too small" to worry about making formal plans, when they are actually the persons most likely to have their estate significantly reduced or wasted by the process of trying to administer its distribution. Persons with children will have an even stronger desire to see as many assets as possible survive the process of distribution to benefit those children. Persons with real estate or other significant assets that require transfer of title will recognize that a properly named executor will be able to complete such transfer much more efficiently, more quickly, and at less cost than a supervised court procedure.

Additional benefits exist for a properly planned estate. For example, a simple will can contain a "Contingent Minor Trust," which would dictate that assets left in a will to a minor would be held in trust for that minor, with the deceased person having chosen who should be the "trustee" or caretaker of those funds, and at what age the funds should be turned over to the minor, rather than the minor automatically taking the funds at the age they become an adult under state law. Parents may understand that a child who becomes an adult under state law may not be prepared to wisely handle a lump sum inheritance. Parents can nominate guardians for their minor children, giving the courts much appreciated guidance as to their wishes in the event of the death of both parents. "Spendthrift clauses," "No Contest clauses," and other will provisions can be inserted to protect the wishes of the deceased person.

Larger and more complex estates can benefit from a more complex will that may contain more elaborate trust provisions, taking advantage of estate tax, gift tax, and income tax laws to reduce the amount of total taxes taken from the estate, therefore maximizing the amount of net assets reaching the children and heirs of the maker of the will. The threshold value at which an estate begins to incur estate taxes is currently $600,000, and will rise to $1,000,000 by the year 2006, but with real estate, retirement plans, life insurance and other less obvious assets being included in the taxable estate, many persons may reach that threshold that might not have anticipate paying any such taxes. In the event that a person has children from a prior marriage, special trust provisions can insure that the needs of a current spouse will be taken care of during that spouse's life, but that remaining assets will be distributed to all children of the deceased. Further discussion of more complex estate planning options are outside the scope of this article.

A proper will is one of four documents that make up a basic estate planning package. Given the right circumstances, the existence any one of the other three documents could become as important as that of the will itself, therefore their value cannot be diminished. The other three documents are a Statutory Durable Power of Attorney (for property issues), a Power of Attorney for Health Care, and a Directive to Physicians (or Living Will).

The Statutory Durable Power of Attorney allows another person of your choosing to handle asset and property matters for you, such as your business, investments, real estate, etc., in the event you are temporarily incapacitated, due to an incident such as an accident or illness. A doctor will need to certify that you are in fact temporarily incapacitated for the power of attorney to take effect, unless you decide at the signing of the power of attorney that you would prefer the power to take effect immediately. Depending on the complexity of your asset holdings and the duration of such an incapacity, the existence of such a power of attorney could be critical to the health of your assets and property interests. Obviously anyone with their own business, a stake in running a business, or a valued investment portfolio, would have a lot to lose by not having such a power of attorney in place.

A Power of Attorney for Health Care allows another person to make necessary health care decisions for you that you would be able to make if you were not temporarily incapacitated. Again, a doctor would need to make the determination that you were temporarily incapacitated for this power to be enacted. The existence of such a power of attorney can be very valuable in getting critical health care decisions made quickly.

A Directive to Physicians or Living Will is a document stating that if you are permanently incapacitated, due to circumstances such as an accident of illness, and two doctors certify that your incapacity is permanent and irreversible, you do not wish to be kept alive artificially by machinery (such as a respirator). The technology and ability of our doctors to prolong "life" has, in many persons opinion, extended beyond what we would desire if we were able to express those desires. The Directive to Physicians is the opportunity to make your wishes on the subject known before such circumstances arise.