There are three types of documents that most people should have in any Estate Plan.
In order of importance, they are:
- Medical Power of Attorney/Designation of Health Care Agent
- General Statutory Durable Power of Attorney
A Will is the document that you prepare to say who you want to receive your property at death, and who you want to handle your estate. If you have minor children, you would also want to name the person that you want to be the guardian of the children, and the trustee of the minor’s trust (minors are not able to take gifts directly; the gifts need to be held in trust for them until they are adults).
Medical Power of Attorney/Designation of Health Care Agent
Medical Power of Attorney/Designation of Health Care Agent is a document that allows you to name an agent to make health care decisions for you, if you become unable to make those decisions yourself. Without this document, neither your spouse nor your children have any authority to make health care decisions for you, except in an emergency, without a court appointing them as your guardian.
Statutory Durable Power of Attorney
The general Statutory Durable Power of Attorney is a document that allows you to name an agent, or “attorney-in-fact”, to make other non-health care decisions for you. This would include things like paying your bills, and generally handling your affairs. You can make this effective immediately, or reserve those powers until you become unable to handle your own affairs.
Flat Fee for Wills – Our firm charges a fixed of flat fee for basic wills preparation when there is no unusual drafting or tax planning needed. Please give our office a call for costs.
Do you know the difference between having a Will and not having one? Please take a look at “Do you have Will Power?”.
Preparing a will is usually a pretty straight forward process. Before you meet with an attorney, it is helpful to have some idea of how you would like your property to pass and whom you would like to name to handle the probate, raise your children, and hold their property in trust. To see more information on what should be considered, please take a look at the minimum information needed to prepare a basic Texas will.
If you do not have a will, that is considered as being “intestate”. Your will is basically your contract with the state. If you do not have one, the state creates one for you. Sometimes the distribution that happens under the laws of intestacy gives very strange results. Would you really want to own your home or your business with your step-children, or your in-laws? To find out how your property would pass if you do not have a will, see the Distribution Of An Estate In Texas Without A Will.
If you have moved to Texas from another state, you should have your will and other documents reviewed by an attorney here to see if it provides all of the benefits under our laws. The laws of each state are different. Some states do not allow for an independent administration (a probate without court supervision), but Texas does. By updating your will to take advantage of our independent administration provisions, you may save your estate thousands of dollars.
Please give our office a call for a no-cost review of your out-of-state wills.
Even if you have prepared a Living Trust, you should also have a will with a “pour-over” provision. This is necessary in case not all real and personal property was transferred into the Trust. See more information on Living Trusts. Again, if you have moved to Texas from another state, you should have your Pour-Over Will reviewed to make sure that it provides all the benefits allowed under Texas law.
Reviewing and Updating your Wills – You should review your Wills, Powers of Attorney documents, and beneficiary designations at least every 3 to 5 years, or sooner if you know that you have had some major family changes.
Some things that may make changes to your documents necessary are:
· Marriages or remarriages
· Divorces or pending divorces
· Births and/or Adoptions
· Deaths and Incapacity
· Children growing up and becoming adults
· People moving away
· Changes in Tax laws
· Relocation to another state
Sometimes when folks have moved away, it may be beneficial to change the order of Executors, Trustees or Agents. Have any of the people named lost capacity or have any special needs? Might some property have to be held in trust? Do you now have a blended family? Have the family situations of the people you have named cause them to now not be able to act as an Executor, Trustee or Agent? Might you want to name a child as alternate an Executor, Trustee or Agent that had been a minor child when your original documents were prepared?
Another reason you many need to change your Will or estate plan is changes in tax laws. Has Congress lowered the exemption amount before Federal Estate Tax kicks in? Has your estate grown to the point where you may have a taxable estate? Have you increased the amount of insurance that you carry? (Uncle Sam will look at that as part of your taxable estate.)
After you review your documents, if no changes are needed, put your documents away, and know that that your paperwork is in order and that your family will be taken care of. If you need to make some changes, don’t put it off. You will feel much better knowing that your beneficiary designations name the folks that you want, and your documents do what you want them to do.
If you have any questions about your documents or don’t understand what they do, please give us a call and we will be happy to go over them with you. We will take the time to find out what you really need, and will let you know if nothing needs to be done.
For additional information, please take a look at some of the following posts on related topics: