Why Young Families in Texas Need an Estate Plan

Do you need an estate plan? If something happened to you tomorrow, who would raise your kids? Who would manage their money? These are questions most parents do not want to think about. But here is the truth: if you do not make those decisions now, the court will make them for you. And it might not choose the person you would have picked.

Everyone Needs an Estate Plan

If you are a young parent without an estate plan, I hope you will stick with me for a few minutes. This could profoundly change everything for your family. Estate planning is not just for the wealthy or the elderly. It is for anyone who has someone they love and something they care about.

For young families, the most important reason to have a plan is your children. Estate planning gives you the ability to decide who would care for them if something were to happen to you.

Avoiding Costly Court Decisions

Without the right estate plan in place, your children could inherit money or property directly. But minors cannot legally own assets. That means the court would have to appoint a guardian of the estate to manage those assets, and that process can be lengthy, expensive, and stressful.

The right plan helps you protect your kids and ensures their inheritance is managed wisely. It also keeps your family from getting tangled in a costly legal mess that could have been avoided with just a little preparation.

Naming Guardians in Texas

One of the first steps in estate planning for young families is naming guardians. In Texas, you can do this in your will or in a separate legal document called a Declaration of Guardianship for children. There are actually two types of guardians you will want to consider. A guardian of the person oversees daily care, medical decisions, and schooling. A guardian of the estate manages the child’s money and property, including any inheritance.

Why a Trust Is So Important

Here is the thing many parents do not realize. Appointing a guardian of the estate can be expensive and complicated. That is why I often recommend setting up a trust for minors. Children under 18 cannot inherit directly, so we create a testamentary trust in your will. This trust allows someone you choose, called a trustee, to manage the child’s money on their behalf.

You can even choose the age at which they receive full control of those assets. This could be 18, 21, or later. I typically recommend 25. The trustee is usually someone close to you whom you trust to be responsible with money. They can pay for things like school, healthcare, and daily needs, either directly or by working with the child’s guardians.

Special Planning for Retirement Accounts

If you have retirement accounts, those require special attention. I often help families set up a Retirement Benefits Trust so children can receive those funds properly. Since minors cannot inherit directly from married parents, I usually recommend naming your spouse as the primary beneficiary and the trustee of the Retirement Benefits Trust as the contingent beneficiary.

For divorced parents, I recommend naming the trustee of the Retirement Benefits Trust as the primary beneficiary. Naming a Retirement Benefits Trust instead of your estate as the beneficiary can help minimize taxes and make everything simpler and more secure for your kids.

The Role of Life Insurance

Life insurance is another essential tool for young parents. If something unexpected happens, life insurance can help cover daily expenses, easing the financial burden on your loved ones. For married parents, it is best to name your spouse as the primary beneficiary. If something happens to both parents, then your estate or a trust for the benefit of your children should be the contingent beneficiary.

Never name minor children directly since they legally cannot receive the funds. Doing so can cause delays and create complications you want to avoid. For divorced parents, naming your estate or a trust for your kids as the primary beneficiary ensures the money is managed responsibly for their benefit.

Planning for Their Future

Estate planning is not just about emergencies. It is about helping your kids thrive in the future. I often recommend that families consider savings tools like UTMA accounts or 529 College Savings Plans to start building for what comes next.

When you put these pieces in place, you are making sure your children are protected, their inheritance is secure, and your wishes are followed.

Protecting Your Family on Your Terms

Creating an estate plan is not about fear. It is about love, responsibility, and protecting your family on your terms. You can name guardians for your children now, before a court must decide for you. You can set up a trust to protect their inheritance and decide when and how they will receive it. You can plan for your assets and your future with confidence.

If you are ready to take that first step, I would love to help. Schedule a consultation with me at J. Nichols Law. Together, we can build a plan that gives you clarity and gives your family protection that lasts.

Thank you for reading, and do not forget to share this with other parents who want to protect their family legacy.