Wills, Trusts and Estate Planning

Wills, Trusts and Estate Planning.

Our attorneys are able to focus personal attention on individuals and families who seek to be sure their estate and assets are passed down to loved ones and charities of their choice through careful planning with Wills, trusts and lifetime transfers.

We also assist executors, trustees and beneficiaries in the processes of probate and trust administration.

The Basics of Texas Estate Planning

The death or incapacity of a loved one is a difficult situation that, unfortunately, all of us face eventually. The difference in the level of difficulty faced is entirely in your hands—how well did you plan for this contingency? Estate planning has been often been called a “labor of love”-----if you love your family, you will take the time to sign the proper estate documents ahead of time so you can ensure that your family and legacy are protected, and that there is as little financial impact on your family as possible.

The basic estate plan has two essential aspects—the designation of individuals to act on your behalf in the event of your incapacity, and the proper and clear disposition of assets in the event of your death, with an eye towards the minimization of expense and administrative burdens on the loved ones you leave behind.

The Basic Estate Planning Documents

Most persons in Texas will need only the following estate planning documents:

Last Will and Testament
The most important document that is a necessary part of any estate plan is the last will and testament. This document will serve many important purposes, including directing how your assets should be disposed of at your death, choosing persons or companies to administer your estate (and any trusts created by the will), and selecting guardians for any minor children.

Absent a last will and testament, the laws of the State of Texas directs who inherits a person’s assets. This can lead to major problems. Perhaps one of the most frequent problems that arises in such a case is the conflict of a deceased person’s surviving spouse of a second marriage and the deceased person’s children from his/her previous marriage. Many couples expect or desire that their surviving spouse inherit their entire estate. Without a will, however, in the case of a second marriage, the property of a deceased person will be split between the surviving spouse and the surviving children of the deceased person, including the children from the deceased person’s previous marriage. Additionally, in the event any of those surviving children are minors, an expensive guardianship would have to be obtained through the Probate Court to manage those children’s inherited assets under court control for years until each child is 18 years old, and then the inherited property, which is often substantial, would then be distributed to the child at that very young age.

Another important purpose of a will is the ability to create trusts within the will for the benefit of your loved ones. These trusts can protect your prospective heirs from fraud, misappropriation, and waste. For example, trusts can be set up in the will, for the benefit of children under the age of 25 years who inherit assets under the will, to have a trustee manage their inherited assets for the children until they reach the age of 25 years so that they do not unwisely spend their inheritance at their very inexperienced ages. Additionally, in the event any prospective heirs of your estate are incompetent or disabled, recipients of government benefits or subsidies, trusts can provide additional support and improve the lives of your loved ones without jeopardizing your beneficiaries’ entitlement to those benefits.

Financial Power of Attorney
Equally important is the financial power of attorney or “FPOA”. The FPOA allows your choice of individual to act on your behalf in making financial decisions and managing your financial affairs in the event that you are unable to do so. The FPOA may be limited in its scope (i.e. giving authority to a certain family member to run your small business), or may give complete authority to the agent. Without a FPOA, your loved ones would have to bring a formal guardianship proceeding to exercise power over your financial affairs in the event of incapacity. Guardianship proceedings are expensive and uncertain, and there is no guarantee that the outcome will be that which you would have desired if you were able to speak for yourself. As with all aspects of estate planning, it is best to think of these issues and make the decisions for yourself, or you may find the state making them for you. 

Medical Power of Attorney
A Medical Power of Attorney is an important legal document which sets forth the person or persons who you would like to make healthcare decisions on your behalf in the event of your incapacity. Absent such an instrument, your healthcare provider may not have the proper guidance as to who you would trust to make these important decisions, or information on how to contact the person who you would designate. By preparing a medical power of attorney, you will assist your physicians and nurses in providing the care that you would want to receive if you were able to speak for yourself.

Directive to Physicians
A Directive to Physicians is legal document which outlines your in-advance wishes as to any limits to your medical treatments if you are in a terminal or irreversible medical condition and you are not capable of expressing those wishes while in those conditions.

HIPAA Authorization
The Health Insurance Portability and Accountability Act (“HIPAA”) limits disclosure of your medical information. The HIPAA Authorization allows your loved ones, especially the person(s) designated in your Medical Power of Attorney, to get access to that information to help make medical decisions when needed.

Planning for Disposition of Life Insurance, Annuities, IRA’s, 401K’s and other Retirement Assets

Death proceeds of life insurance and annuities and amounts at death held in IRA’s, 401K’s and other retirement assets DO NOT pass at death in accordance with instructions in a person’s Will. Each of these assets ONLY pass to beneficiaries outlined in written beneficiary designations given by the owner of the asset to the respective insurance or investment company holding the financial asset. If the owner has not given updated written beneficiary designations on one of these type of assets to the company, that company’s documents determine to whom that asset passes to at death, often to unintended beneficiaries. DON’T LET THAT HAPPEN! Your estate planning attorney can give you the proper written beneficiary designations to give to these companies so that they coincide with your Will.

Creating a “Legacy Drawer” for all your important financial information

Having a select place or “Legacy Drawer” to store important documents can come in handy in helping loved ones to help you through your difficult times and settle your estate after your death without having to loving ones to have to search and sift through mounds of your files and paperwork when they need to when the time comes.

Suggested documents for this “Legacy Drawer” are:

• Wills, Powers of Attorney, Directive to Physicians and HIPAA
• Life Insurance, Disability, Health Care and Long Term Care Policies and Annuities and agent/advisor contact info
• Vehicle Titles
• Pension, Retirement and Mutual Fund Account information and advisor contact info
• Credit Card account information
• Digital asset account information and passwords