ESTATE PLANNING 101
Proactive Planning is the Greatest Gift
Who Needs an Estate Plan?
The short answer, everyone. Anyone with any type of property, no matter the size of your estate; anyone with family members they want to protect from the costs and time associated with probate; anyone with minor children; and anyone who wants a certain person, people, organization, etc. to receive some or all of their property upon their death.
Contents of a Simple Estate Plan:
- A Will
- Durable Power of Attorney (for finances and property)
- Medical Power of Attorney
- Advance Directive to Physicians
Purposes of the Will?
1. Protects Minor Children
A Will is the easiest way to transfer guardianship of minor children. You can choose guardians and alternates for your children as well as guardians of the estates of the minor children. A Will can also create a trust to protect the finances of your minor children.
2. Disposition of Your Assets/Property
A Will gives you a way to tell the world how you want your property disposed of or distributed upon your death. You can choose to give your property to family members, friends, charities, etc. An experienced local estate planning attorney can help you ensure your wishes will be followed upon your death.
3. Avoid Probate
In Dallas, Denton, and Collin counties, probate is not as difficult as it may be in other areas around the state or the country. However, probate of an estate without a Will (intestate) is much more costly and difficult than administering an estate with a properly executed Will, written by an experienced estate planning attorney. Furthermore, distribution of your property will follow the rules imposed by Texas Law as interpreted by your local probate Judge instead of executing your individualized wishes.
What is a Durable Power of Attorney?
A Durable Power of Attorney allows you to specify a person or people to make financial decisions for you prior to your death (the Executor of your will would be given many of those powers upon your death).
This document makes someone your legal agent, allowing that agent to sign documents on your behalf and manage your financial affairs. Under the Durable Power of Attorney, your agent or agents must uphold a strict fiduciary duty to you and you can limit or expand the specific powers give to your agent within the durable power of attorney. Also, the durable power of attorney can either become effective immediately upon signing the document, or it can become effective at a later date (i.e. upon your subsequent disability).
You will want to work with your estate planning attorney to determine the most beneficial use of the durable power of attorney in your current situation.
What is an Advance Directive to Physicians?
An Advance Directive states your wishes regarding life sustaining medical intervention in the event you are unable to communicate your wishes to your health care provider. This is an important document in your estate plan because it removes the need for loved ones to make difficult decisions regarding your end of life care.
What is a Medical Power of Attorney?
A Medical Power of Attorney lists agents to make health care decisions for you in the event you are unable to make such decisions on your own. This is different from an Advance Directive because it names people who will need to make health care decisions, instead of simply listing some of your own wishes for the treating health care providers. Not only is this an important document for those planning their estates, but the attorneys at Hanshaw Kennedy, LLP recommend that college students and other young adults consider executing a medical power of attorney designating their parents to make such decisions in case of emergency. Without this and a HIPAA Release, parents may have a difficult time obtaining information from health care facilities and may need court intervention before they can make such decisions on behalf of their adult children.