Seven Highly Effective Texas Estate Planning Documents
The ABA and every State Bar, including Texas, recommend adults have a will. These seven documents detailed below create a solid foundation for effective estate planning in Texas.
Will -- A last will and testament spells out how you would like all of your possessions, assets, property, and any other items you own will be distributed. A will can also create trusts (testamantery trusts) and may contain estate planning clauses that save the estate's tax costs.
If a person dies without a will, that person is said to have died intestate, and Texas has laws to determine how a person's property is distributed. Many times these laws, however, do not distribute property in accordance with the wishes of the person that died intestate, and, if a person dies intestate, the estate's legal fees will most likely be much higher than if he/she had written a will.
Texas, unlike some other states, allows for a Testator to choose whether or not to have any court approval for delineating their will with either an independent executor or a dependent executor. An independent executor can execute the will with little to no court involvement while a dependent executor must put the will through probate, which means the court must approve and oversee the execution of the will. A person may want either type of executor depending on their circumstances: do they have someone they can trust to carry out their will? Or would it be better to have the court supervise your last wishes? Is cost savings your biggest goal in the estate planning process? This is one of many details to consider creating your will in Texas.
Living Trust -- A living trust (inter vivos trust) can be a great way to avoid costly estate taxes while naming beneficiaries to your property. Persons in Texas can create "revocable living trusts" which, as the name implies, are revocable during the person's lifetime. The person can name themselves the trustee (a trustee controls the trust) and "fund" the trust (putting capital into the trust), potentially reducing the cost of will probate, while allowing the person to continue to control the property used to fund the trust.
Designation of Guardian -- A properly executed Guardianship document tells the court who will take charge of caring for your child or children. This can be a part of the will or a completely separate document.
Advanced Healthcare Directives -- The four documents explained below are part of a group of documents called advanced healthcare directives. These documents are detailed in another blog article, which you can access here.
HIPAA Authorization -- A HIPAA authorization allows the person you designate to be able to receive medical information about you. This document helps the person you choose to remain in communication with your doctor about your health while in the hospital. To see more about HIPAA authorizations, please see my article on advanced healthcare directives (AHDs).
Medical Power of Attorney -- A medical power of attorney lets you choose someone to make healthcare decisions for you in the event of your incapacitation. To see more about medical powers of attorney, please visit my article on AHDs.
Statutory Durable Power of Attorney -- Sometimes referred to as a financial power of attorney, or durable power of attorney, this document gives the person you choose to handle your financial affairs if you were to become incapacitated from injury. To see more, visit my article on AHDs.
Directive to Physician -- Also referred to as a living will, this document tells physicians what to do regarding your end-of-life care choices. To see more about physician's directives, please visit my article on AHDs.
--Charlton M. Messer, Esquire
This article is for informational and educational purposes only. Please contact your attorney for more information on the items described above.