Even the relatively young and healthy should consider taking the time to think about estate planning. It is often beneficial to do so because it not only prepares one for the unthinkable, but is also a good financial management tool.
For those Texas residents who are currently working on estate plans, or are thinking about doing so, the present troubles faced by the education system may bear watching as they may lead to changes in property taxes. That, in turn, may impact how you decide to allocate your real estate assets.
Last May, Texas legislators passed a budget that provided $53.8 billion for school funding. Although that seems like a large amount of money, many Texas schools have previously been left underfunded.
While we all want Texas students to have the best educations possible, school funding needs to come from somewhere. At the moment, about 47 percent of all school funding comes from property taxes. These taxes are collected at the local level, meaning that more affluent counties have more money to spend per pupil than less well off areas. To address the problem, a program has been in place for the past ten years that redirects a portion of property taxes from wealthier to poorer counties. As an alternative, some have called for property taxes to be collected at the state level.
It is unknown what will happen to property tax rates in the future and those that are planning an estate need to be aware of the changes. If property is left to heirs, families need to sure that those heirs are capable of paying the necessary taxes. Although estate planning is an essential tool for many families, more thought may need to put into the planning to be sure assets are distributed responsibly.
Source: Bloomberg Businessweek, “Texas School Finance Fix Eludes Perry as Students Do Without Art,” David Mildenberg, Dec. 1, 2011