Establishing an estate plan is one of the biggest steps you can take to protect yourself and your loved ones. Proper estate planning not only puts you in charge of your finances, but it can also spare your loved ones of the expense and frustration of managing your affairs once you’ve passed away.
In addition to planning for the financial aspect of your affairs during incapacity, at The Law Office of Brian Bagley, PLLC we establish a plan for your medical care. The law allows for you to appoint someone to make decisions for you about medical treatment options if you lose the ability to decide for yourself. By utilizing a power of attorney for health care, you may designate the person to make such decisions. In addition to a power of attorney, we recommend having a living will that informs others of your preferred medical treatments.
If you leave your estate to your loved ones, using a will, most of what you own will pass through probate. The process is open to the public and can be expensive and time-consuming. The probate courts are in control of the process until the estate has been settled and distributed. If you are married and have children, you want to make certain that your surviving family has immediate access to cash to pay for living expenses while your estate is being settled.
The IRS will want to review your estate at death to ensure you don’t owe them a federal estate tax. There are many effective strategies that can be implemented to reduce or eliminate death taxes, but you must start the planning process early.
A properly crafted estate plan will provide your loved ones in an effective and efficient way of avoiding guardianship during your lifetime, probate at death, and estate taxes. Once your estate plan is in place, you will have peace of mind knowing that you have provided the best arrangement for yourself and your family.
The following is an example of basic estate planing documents that must be present in everyone's estate plan:
Texas Last Will and Testament
A will is a legal document that directs how your property will be distributed when you die, and can create trusts for the benefit or your spouse or children. A will allows you to name a person you trust to oversee the management and distribution of your assets. It also allows you to appoint a guardian to care for your minor children.
Without a will, your assets will be distributed according to a statutory formula, which may conflict with how you would have liked for your assets to be distributed. Also, if you do not appoint a guardian for your minor children, a judge who doesn’t know you or your family may have to make that decision for you.
Texas Durable Power of Attorney
A durable power of attorney gives you the power to appoint a trusted family member or friend as an agent to manage your finances if you are no longer capable of managing them yourself, such as if you become temporarily or permanently incapacitated.
If you become incapacitated and do not have a statutory durable power of attorney in place, a court-ordered guardianship may be necessary. Guardianship is time-consuming and expensive, and can be avoided by creating a power of attorney.
Texas Medical Power of Attorney
A medical power of attorney is a document that allows you to designate a trusted family member or friend to make medical decisions for you in the event you become unconscious or mentally incapable of making those decisions for yourself.
Medical powers of attorney are not just for the elderly. Unexpected injuries or illness can occur at any age, so all adults should have one in place.
HIPAA, the Health Insurance Portability and Accountability Act, is a Federal law that sets rules and limits on who can look at your medical records or receive your health information. Covered entities that violate HIPAA face stiff penalties, which make them reluctant to share medical information with anyone but the patient, even close family members.
A HIPAA authorization allows you to name an individual who can have access to your medical information so that your health care provider or insurance company have no reservations about sharing medical information with those whom you have authorized.
Texas Directive to Physicians
A living will, or directive to physicians, is a document that allows you to instruct your physicians not to use artificial methods to extend your life in the event you are diagnosed with a terminal or irreversible condition.
All these documents are essential to making sure your wishes are followed and your family is protected in the event of your incapacity or death.