This article is for educational and entertainment purposes only. This is not legal advice and should not be relied on as such. Every case is different. Consult a licensed professional in your state. Viewing this website or its content does not create an attorney-client relationship with Lyda Law Firm or any of its lawyers.
Article written by Maria Ortiz.
Preparing an estate plan can seem like a daunting task. Some might find it unnecessary if they do not have substantial funds or property of significant value. Others might be interested in preparing an estate plan but are just not sure where to start.
Hesitation in preparing an estate plan is often the result of a lack of knowledge or understanding as to what an estate plan is and why having one is necessary.
Thus, this article answers three main questions: (1) What is estate planning? (2) What are the essential components of an estate plan? and (3) What are the consequences of not having an estate plan in place?
Let's begin by addressing the first question.
In short, estate planning is the process of taking certain proactive measures to plan for an individual's future, particularly the distribution of an individual's assets upon death.
When most people think of estate planning, they typically think of a will, the coveted document that states which of their children will receive the prized family heirloom. However, a comprehensive and thorough estate plan can provide for more than simply where an individual's property will be distributed at death.
An estate plan can also include language that names a guardian if a parent dies with minor children. Additionally, through an estate plan, an individual can appoint a power of attorney to make either financial or medical decisions should that individual become incapacitated.
An estate plan, at a minimum, should consist of the four following documents: Will, Medical Power of Attorney, Durable Power of Attorney, and Directive to Physicians.
A Last Will and Testament - commonly abbreviated to a "will" - is a legal document that dictates how an individual's assets are to be distributed upon that individual's death, while also appointing an executor to oversee the distribution of these assets. Additionally, a will can create a trust or appoint a guardian for a person’s minor children at the time of that person’s death.
To be considered a valid will, a document must meet certain requirements, depending on the state in which the will is to be probated. In Texas, for example, a typewritten will is valid if it is created by an individual over the age of 18, the individual is of sound mind, and the will is signed by the individual in the presence of two witnesses, who must also sign the document.
Alternatively, a handwritten will – also known as a holographic will - is valid if it is written entirely in the individual's handwriting, signed by the individual, and created with testamentary disposition and intent. Essentially, the individual must include clear language stating that the individual intends for the document to be the individual's will.
Notably, a will does not have any legal effect until the person’s death. Thus, a person can revise or revoke their will at any time.
A will covers decisions regarding property and care for minors upon a person’s death. What about issues that may arise during a person’s life?
For example, say an individual suffers an accident and is left unable to make decisions regarding their own medical or financial matters. Because the individual is still living, the individual's will has no legal effect. Is the individual then left with no resolution?
Fortunately, with proper estate planning, the answer to this question is, "No." Assuming the individual designated a medical power of attorney and durable power of attorney, proper arrangements can be made.
A Medical Power of Attorney designation is a legal document in which an individual appoints someone to make decisions on his or her behalf related to the individual's medical care. Depending on what the individual chooses, a Medical Power of Attorney designation can take effect immediately upon designation, or at a later date, such as upon a finding that an individual is incapacitated.
Of course, the decision of when the designation takes effect is ultimately up to the designating individual. Nevertheless, it is important to consult with an attorney regarding the advantages and disadvantages of either option.
A Durable Power of Attorney designation is similar to a Medical Power of Attorney designation. However, instead of having authority to make decisions regarding medical care, the designated power of attorney will have authority to make decisions regarding financial matters and the transfer of assets.
With both Medical Power of Attorney and Durable Power of Attorney designations, an individual can indicate the duration in which the individual would like the power to continue. Additionally, an individual can designate alternate agents in the event the designated power of attorney is unable to serve.
Finally, an estate plan should also contemplate situations where an individual may need life-sustaining treatment.
People tend to have different opinions on whether they would like to endure this type of treatment. Sometimes an individual's wishes regarding life support treatment differ from that of the individual's family. A Directive to Physicians ensures that the individual’s wishes are clearly expressed.
A Directive to Physicians, sometimes referred to as a Living Will, is a document that conveys an individual's desires regarding certain types of medical treatment, particularly when the individual is suffering from a terminal condition. By preparing a Directive to Physicians, an individual eliminates any doubt from the minds of their loved ones regarding the type of care they would like to receive. This alleviates some of the stress that the individual's loved ones may have to endure were they left to make the decision without any guidance.
Now that we've discussed these estate planning tools in detail, let's consider the consequences of neglecting to incorporate these documents into your estate plan.
If a person dies without a will, the person is considered to have died "intestate." As a result, the person's assets will pass according to the Texas intestacy laws - that is, the individual's property will be distributed according to a method predetermined by the Texas legislature.
Therefore, an individual who has died intestate is stripped of any autonomy regarding the distribution of their probate assets.
Not only does this process eliminate any choice on the part of the decedent, but intestacy also tends to increase the complexity, duration, and ultimately cost of probate proceedings. Creating a will can better ensure that your loved ones do not have to endure the burden of probating your estate under the laws of intestacy.
Similarly, if a person becomes incapacitated without having a designated medical or durable power of attorney, the incapacitated person risks losing some form of autonomy regarding the person's medical care and property transactions.
For example, if an incapacitated individual needs medical care, but has not designated a medical power of attorney, medical care providers must abide by a prioritized list found in the Texas Health and Safety Code.
Accordingly, the family member that is ultimately authorized to make the decision may not be the incapacitated person’s preferred choice for making healthcare decisions. In fact, in some cases, the authorized family member may even be the least preferred choice. Thus, designating a medical and durable power of attorney is one of the best ways to preserve your preference.
Lastly, failure to prepare a Directive to Physicians often results in doubt as to an individual's wishes regarding life support. This can leave the individual's loved ones to make the difficult decision of whether to terminate life-sustaining medical treatment.
If a person suffers a tragic accident and is left in a terminal condition, chances are the individual's family is already in an emotional and stressful state. If the person does not have a Directive to Physicians, the family's stress multiplies because they now must make a heart-wrenching decision. To alleviate the stress and anxiety that comes with making this decision, it is best to prepare a Direct to Physicians.
Schedule a consultation with an estate planning lawyer today to discuss the right estate plan for you. Although it may seem daunting, preparing an estate plan does not have to be a difficult process, and Lyda Law Firm can guide you every step of the way.
At Lyda Law Firm, we offer affordable flat rates for individuals and couples in need of an estate plan. If you have questions or need assistance preparing or updating your estate plan, please contact us so we can help you plan for your future today.
Disclaimer: This article is for educational and entertainment purposes only. This is not legal advice and should not be relied on as such. Every case is different. Consult a licensed professional in your state. Viewing this website or its content does not create an attorney-client relationship with the Lyda Law Firm or any of its lawyers.
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