Talking to an estate planning attorney is something that most people tend to put off again and again. And it’s easy to understand why. It can be uncomfortable, to say the least, to discuss what will happen after your death. No one really looks forward to it, but like getting regular dental check-ups and doing your taxes, setting up an estate plan is necessary and beneficial. And unlike the other examples, you do not have to do it every year.
Last Will and Testament
The most important document in most people’s estate plan is the last will and testament, usually referred to simply as the will. The will is the document in which you state what should happen to your property after you pass away. Do you want everything go to your spouse, your parents, your children, or be split amongst relatives and/or close friends? Perhaps you would like to leave some or all of your property to a charity that is close to your heart. Having a valid will is the only way to ensure that your wishes are known and followed.
In addition to disposing of your property, your will can also give instructions about how the probate of your estate is to be handled. In Texas, people who make a will (referred to in legal terminology as “testators”) can appoint a trusted person, whether that person is a spouse, sibling, friend, etc., to act independently in administering the estate. This power is one of the reasons that Texas estate and probate law allows for families of decedents to save a lot of time and money in administering a deceased loved one’s estate. Probate without a will in Texas is certainly possible, but it generally involves a much higher up-front cost to the survivors of the deceased person.
Power of Attorney
Although “estate planning” brings to mind planning for events after your death, it also includes planning for events that might happen during your lifetime. One important document that is a vital part of an estate plan and has to do with lifetime events is the power of attorney. This is also sometimes known as a general power of attorney or a statutory durable power of attorney. Basically, this type of power of attorney allows you to name an agent to act on your behalf in financial matters or real estate transactions if you are unable to do so. For an incapacitated person (ex. someone who is suffering from dementia) a valid power of attorney may be an acceptable, much less expensive alternative to a full-blown guardianship.
Power of Attorney for Healthcare and Advance Directives
The statutory durable power of attorney covers most situations, but it does not address healthcare. That is why there is another power of attorney for medical decisions. This document, also called a medical power of attorney, allows you to designate an agent to make medical decisions for you if you are unable to do so for yourself. It is important to understand that this power of attorney does not give your agent the power to make life or death decisions, such as removal of life support. For that, you need an advance directive to physicians and family surrogates, commonly known as a living will.
A living will is the document in which you indicate whether you want to be kept on life support if you are in a terminal condition and/or if you are in an irreversible condition. Many people feel very strongly that they would not like to linger on life support if they are in a coma or persistent vegetative state. Other people prefer to be kept alive in case their condition unexpectedly improves or medical technology improves. Neither philosophy is better than the other. Both are equally valid. The important thing to consider here is that the decision of whether to continue or remove life support for a loved one is very, very difficult for the family. It helps the family tremendously to know what their loved one would want done.
Estate Planning for People with Young Children
If you have minor children (children under the age of 18 years) estate planning is particularly important. Even with a basic will, you can designate a trusted family member or friend to become legal guardian for your children should you and the children’s other parent (if this person is not your spouse) should both pass away unexpectedly while the children are still young.
A will can also include a testamentary trust to hold property for your children until they are mature enough to inherit it. This age could be 18, or an older age such as 25. The trust could also specify that the child would inherit upon the occurrence of a particular event, such as graduation from college.
Updating Your Estate Plan
As stated above, an estate plan does not typically need to be reviewed or updated yearly, but most people will need to review and update at least once during their lifetime. Circumstances change, relationships change, and sometimes people you assumed would outlive you do not. For a variety of reasons, you should probably consider updating your estate plan every few years, or at least if you have a significant change in circumstances such as a divorce, children becoming adults, or increase or decrease in income to the point that you change tax brackets.