In this article, you can discover:
- The benefits of having a proper estate plan in place.
- The basic documents that are used in estate planning.
- Some reasons you should consider a living revocable trust.
What Should A Proper Estate Plan Do For Me?
An estate plan can do a variety of things. First of all, it’s a gift to your family. Having an estate plan that provides an organized way to deal with death and assets gives your loved ones breathing room.
Especially in cases of unexpected death, an estate plan allows family members to grieve and focus on moving forward, rather than scrambling to deal with an unorganized mess. This is one of the biggest advantages of an estate plan.
Additionally, it ensures that your assets pass the way you wish them to pass. It can also protect your assets because, with proper planning, you can reduce taxes, conflict, and expenses.
What Basic Key Documents Are Generally Involved In Estate Planning?
There are many basic documents used in estate planning. The primary decision we make in the estate planning process is whether your core document, the main focus of your estate plan, will be a will or a trust.
A will is a document that you would execute, put in a drawer, and not have to think about again. It is best practice to check your will every five to seven years to make sure it still suits your needs. However, you normally would not need to do anything else if there were no changes.
After your death, someone would take the will through the probate process. This involves qualifying your executors and proving to the courts that your will is valid. Your executor can gather the assets and then distribute them, which differs from a living trust.
A living trust is a document that owns all your assets so that they can pass automatically, outside the probate process. Once you decide whether a will or a trust is right for you, then you can move on to the ancillary documents.
The ancillary documents are often called disability documents. We’re living longer these days, but not always as healthily, and sometimes people need help, especially as they get older.
We include in our estate planning packets a statutory durable power of attorney. This is a document appointing an agent who would deal and assist with all your financial matters. This includes life insurance accounts, real estate transactions, etc.
Another type of agent is the medical power of attorney, which is an agent appointed to deal with your medical issues. They can make medical decisions for you in the event you become unable to do so.
We also include a HIPAA release. HIPAA releases waive the privacy provisions for everyone listed. This document can be helpful in various situations. For example, you may want your spouse to be the decision-maker for all your medical needs, but you might want your adult children or parents to be able to obtain information. Adding someone to the HIPAA release allows them to:
- Contact your doctors
- Speak to a hospital where you are receiving care
- Obtain information on your condition
- And more…
The next document we include is a guardianship designation. This is rarely used, but in some cases, it is extremely necessary. If the court believed a guardian was needed, you would have already appointed that person and waived the bond. Without this waiver, the guardian has to put up a bond in the amount of your total estate every year.
Now, when would this be necessary? Powers of attorney can do this job approximately 95% of the time. However, there are some rare instances when a guardianship designation would be needed, such as if you were hit by a drunk driver and there was a lawsuit as a result. In this case, powers of attorney would not go far enough.
Lastly, we include advanced directives. Advanced directives deal with how a person would want end-of-life care to be handled. They address situations such as if you were to become unconscious, unable to communicate, and unable to express your needs to your caretakers.
With advanced directives, you would have already decided whether you want life-extending treatments to be given to you. These treatments would not help with your underlying condition but would extend your life. You can elect not to have these treatments and to pass naturally, or you can elect to have all the life-extending treatments done to keep you alive as long as possible.
To recap, the basic estate planning documents in your standard packet would include:
- A will or living trust
- Durable and medical powers of attorney
- A HIPAA release
- Guardianship designation
- Advanced directives
If you’re feeling overwhelmed by the thought of all of these documents – don’t worry! One of our estate planning attorneys can discuss your situation and help you determine which documents may be useful for you. Working with an experienced estate planning lawyer can relieve some of the stress that often comes with estate planning.
What Is A Revocable Living Trust?
Generally speaking, a trust is a contract that holds assets for the benefit of an individual. There are various kinds of trusts. A revocable living trust is where you, as the grantor, put your assets into the trust.
With a revocable living trust, you are still the trustee managing your assets. You still have total control of the assets. You can make changes to the document at any time and you can take the assets back out at any time.
Because the trust owns the assets and not you, you can establish how things will be distributed at your death within the trust. That means you could set up the trust so that things pass in accordance with your wishes, similar to a will.
However, you would not need to involve the courts because the trust owns your assets. This is very beneficial because since the trust has directions on how to distribute the assets, there is no need to involve the courts or go through probate.
Trusts are also wonderful because they operate by distribution standards. You can customize the trust so that the assets pass exactly the way you want.
For more information on the Benefits Of Proper Estate Planning In Texas, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (512) 355-0155 today.