6 Important Documents for Your Estate Plan
6 Important Documents for Your Estate Plan
1. Will
This is the document most people think of when discussing estate planning. A will is a legal document that expresses your wishes for how you want your property to be distributed after you die, the person you want to be in charge of making sure the will followed, and can include the guardianship of your children, funeral arrangements and other final wishes.
Some people assume that they don’t need a will because when they die, their spouse will get all of their property. This is not necessarily true. If you die intestate (without a will), here in Texas, Texas laws will govern how your property will be passed out to your heirs. So if you don’t want the state deciding who will get your property, you need a will.
2. Power of Attorney:
There are two types of power of attorneys every estate plan should have: Financial power of attorney and a healthcare power of attorney
a. Financial
A financial power of attorney allows someone else to make financial decisions on your behalf. You can choose the specific financial decisions you want your agent to make on your behalf, and you can choose when the document becomes effective. For most people, they are planning for future incapacitation, so they would choose for the document to become effective only when they are incapacitate and for the power to end when capacity is regained. Other people may need the document to become effective immediately. For example, someone may be traveling out of state or out of the country for an extended period and need someone to handle their financial affairs back home.
b. Health
A healthcare power of attorney allows someone to make healthcare decisions on your behalf. This document is effective only if you are incapacitated or otherwise unable to communicate your wishes. It is really important that you discuss with your healthcare agents the type of care you would want to receive. The goal is for your agent to make the same decisions regarding your healthcare that you would make, if you were able.
3. Directives to Physicians and Family
This document tells your family and physicians the type of care you would want to receive if you were in a terminal or irreversible condition and you could not communicate or were otherwise incapacitated. This document requires you to choose from two types of treatments: continued medical care, or comfort care only. As long as you can communicate and have capacity, you would make your own healthcare decisions. The document defines terminal condition as a condition with a life expectancy of 6 months or less. An irreversible condition is a condition that even if you had the best medical treatment in the world your condition could never be cured. Kidney failure, dementia, and Alzheimer’s are all examples of irreversible conditions. HIPAA Waiver
4. Declaration of Guardian
Only a court can appoint a guardian. The court is not likely to appoint a guardian if your powers of attorney are in place and are working well. But if you have lost one of your power of attorney documents, or if someone challenges the accuracy of one of the documents, then the court may have a reason to step in and appoint a guardian.
A guardianship is a very extreme thing to happen since it strips you of all of your rights. You may recall Britany Spears had a conservatorship (we call them guardianships in Texas) and all of the issues she faced with her conservatorship. So it’s important you have a say in who would serve in this role. Another cool thing about this document is that you can also state who you would not want to serve in this role.
5. Declaration of Appointment of Guardian of Minor Children
If you have minor children, you will want this document so you can appoint the guardian of your children. You need to appoint a guardian of the estate-this person handles the money for your children and a guardian of the person-this person typically has custody of the child since they are making the daily living decisions. Most people put the same person in both roles, but if you have a sister who is very loving but terrible with money, you have the flexibility to name a different person the guardian of the estate.
And those are the 6 most important documents you need in your estate plan. So if you haven’t already, I recommend reaching out to an attorney in your area to create your estate plan.