What Is Estate Planning And Why Do I Need It?
by
Adair Melinsky Buckner on May. 31, 2013
Estate Estate Planning Estate Wills & Probate
Summary: Why you should do estate planning.
A typical estate planning package includes: a Will; a Statutory Durable Power of Attorney; a Medical Power of Attorney; and a Directive to Physicians ( or Living Will). These documents cover situations in which you need to plan for and which must identify who does what not only after your death but also while you in the event you are unable to do certain things for yourself.Why Do I Need These Documents?
1. Will. To Most Cheaply Determine What Happens of Your Death.
a. Specific Provisions for Who You Want to Get What.
If you do not have a Will, the laws of Texas will say what relatives get what share of your estate. For instance, if one spouse dies and the other still survives, if there are children from the deceased spouse's prior marriage (who are not also children of the surviving spouse), the deceased spouse’s one-half of community property goes to the children, if there are any. Most spouses want the surviving spouse to receive their one-half of community property instead. You must have a Will to do this. If you want to assure that a specific person receives a specific asset on your death, such as a piece of land or jewelry or family antique, the only way to accomplish this is through a Will.
b. Passage of Title to Real Estate and Other Assets.
If you do not have a Will in the State of Texas, and you own real estate, title to that property cannot be passed to your heirs or other person you might designate without considerable expense. Your heirs may have to file for an expensive administration of your estate or a court-filed heirship determination. Sometimes, if all the heirs agree and none are minors, an Affidavit of Heirship and Family Settlement Agreement can be entered into by your heirs and filed in the public records where the real estate is located. The real estate will have to pass by Texas laws of inheritance though, which may not be what you want.
If you have a Will that includes provisions for independent administration of your estate (which any good will should), a probate of the Will is much less expensive than other court proceedings to allow passage of title to real estate and other assets, and provide for their disposition to the person you desire.
c. Setting Up Trusts for Property to Go to Your Children Until They Are Old Enough to Manage the Property Themselves.
If you do not set up trusts under your Will for property which your children are to receive, a court-administered guardianship likely will be required to manage the property until they reach age 18 which will only last until the children are age 18—then they get the property outright. If you specify in your will that the property is to be held in trust until a later age than 18, say 21 or 25, that requirement will apply. The person you designate as trustee will continue to hold the property for the child’s benefit until he or she reaches the age you’ve stated.
Guardianship is an extremely expensive procedure that requires yearly accountings and numerous court filings for buying or selling property. These procedures can easily eat up the minor’s estate before he or she would be old enough to receive it outright. This is a prime reason to have a Will.
d. Designation of Guardians for Minor Children.
If you do not designate in your Will who you would like to serve as guardian of the person (physical possession and care) and of the estate (property) of minor children if both parents are deceased, an ugly, expensive court fight over who should be appointed guardian for them until age 18 can result. Such fights can destroy families and may result in someone other than your first choice being appointed by the court. The court-managed guardianship of the estate can be avoided by appointing a trustee in your Will to manage the property for the minor beneficiaries.
2. Statutory Durable Power of Attorney. This determines who can handle your business affairs if you become incapable of doing it yourself.
If you do not have a Power of Attorney drawn up, while you are competent, to provide for who can manage your affairs if you do become incompetent, a court-administered guardianship may be required. Again, this is a very expensive, time-consuming, possibly contentious, and burdensome process that could be avoided by drawing up a Power of Attorney. This way you get to designate the person or persons you trust to do this rather than leaving it up to a court to decide without your input.
3. Medical Power of Attorney. This determines who can make healthcare decisions for you if you are not capable at the time of making them yourself.
If you are in an accident, or for any reason are unconscious or incapable of telling doctors or hospital staff what your wishes are for health care, the Medical Power of Attorney (MPOA) spells out who you want to make those decisions for you. The MPOA usually is coupled with a Release for HIPAA information so the person you designate to make decisions has full access to your health care information. If you do not have the MPOA and HIPAA release in place, your medical care, and certainly your personal wishes, can be jeopardized while medical staff sort out who can speak for you and what should be done.
4. Directive to Physicians (Living Will). This makes it clear to health care providers that you do not want to be maintained on life support.
We are all familiar with heart-wrenching stories about family fights over whether a loved one, who cannot decide for himself or herself, should be kept alive while in a vegetative state. Many times this issue can hang over a family’s head for months or years. This is a very personal decision for which you should make your wishes known before such a situation arises. You do this by spelling out in a Directive to Physicians or Living Will whether you do or do not want such measures to be used to sustain your life if your recovery seems unlikely.
Adair Buckner understands all of the issues that must be faced when it comes to estate planning. She has helped many families, relatives, and individuals accomplish this task with ease and forethought. Adair listens and advises her clients based on their wishes, desires and needs. Contact Adair Buckner today to learn how she can apply her knowledge, expertise and prior success to your situation.
