Getting an estate plan set up is an essential task for all adults. This effort provides your loved ones with information about your wishes. While many people realize that an estate plan provides instructions about what to do with assets upon an individual’s death, fewer are aware that it can also provide critical information about end-of-life care.
If you don’t yet have an estate plan, or you do but you’re wondering if it is enough, there are several components to consider to make your estate plan comprehensive.
A will
Your will is the cornerstone of the estate plan. It outlines who is going to get what assets, but only assets that aren’t covered by any other legal or financial document – like a life insurance beneficiary designation – should be listed in the will. For example, bank accounts are covered by payable-on-death designations, so those don’t need to be listed in your will.
Texas law allows for handwritten or typed wills. Anyone at least 18, in the military or married can write a will. The will must be witnessed by two people at least 14 years old, and those witnesses must sign the will in your presence. With that said, it is strongly recommended to seek legal guidance before drafting and formalizing a will in any format. An experienced estate planning attorney can draft an enforceable will on your behalf — one that addresses your wishes and the needs of your family specifically.
Powers of attorney
Powers of attorney allow someone else to act on your behalf if you become incapacitated. You can name someone to handle your medical care and manage your finances. You can also grant medical powers of attorney and financial powers of attorney to separate people. These powers will typically cease when you regain the ability to make decisions for yourself or if you pass away. At that point, the person you name as the personal representative of your estate can the required decisions.
An advance directive (living will)
The advance directive, otherwise known as a living will, is a document that clarifies your medical care wishes. You can outline what treatments you want to undergo and what you want to avoid. If you don’t want to be resuscitated, you can include a Do Not Resuscitate order in the advance directive.
Trusts
Trusts allow you to pass down assets to your loved ones in a controlled manner without going through probate. Revocable trusts can be changed during your lifetime, but irrevocable trusts cannot. Within these two categories, there are many other types of trusts to consider. These include charitable trusts, special needs trusts and asset protection trusts. Trusts can help an estate avoid the probate process, as well as minimize tax obligations.
Ideally, you’ll get your estate plan together as soon as possible. This can give you peace of mind, knowing that everything is in order if something happens to you. Seeking legal guidance is a great way to get started.