What is Estatee Planning?

Estate planning is the process of creating documents that will protect you in the event of incapacity or disability and that will gift your assets when you die. The majority of the documents that you create for your estate plan are meant to protect you while you are alive. And your estate is just a fancy way of saying all of the stuff you own. So estate planning really is for everyone.

Here are the documents that make up a typical estate plan:

Will or trust: This is the document most people think of when they think of estate planning. The will or trust states how your property should be distributed when you die. Technically, trusts can distribute property while you are still living, but that is a topic for another day.

Medical Power of Attorney: This document allows the people you name to make medical decisions for you if you are incapacitated or otherwise unable to make medical decisions for yourself.

HIPAA Waiver: This document waives your HIPAA (healthcare privacy) rights to allow the people you name to speak to physicians about your medical treatment. You will want to put the names of the people you named as your medical power of attorney agents on your HIPAA waiver document. I tell my clients to think of who would be most likely to come to the hospital and stay with you for an extended time. It’s ususally your closest family members, but for some people it will be their friends or neighbors. These are the people who need to be able to speak to the doctors on your behalf, so add them to this document.

Durable or Financial Power of Attorney: This document allows the people you name to make financial decisions for you if you are incapacitated and unable to make decisions for yourself. The typical financial power of attorney document in Texas lists all of the powers that are listed in the statutes and you choose whether you want your agent to have some or all of those powers. You can also add additional powers to the document. You can also choose to make this document effective upon signing. This option makes sense for people who have difficulty leaving their home or for people who leave the United States for long periods of time.

Living Will also known as Directives to Physicians and Family: This document is a set of instructions to your physicians and family members about the type of medical treatment if you are unable to communicate your decisions for medical treatment and you are in either a terminal condition or have an irreversible medical condition and are expected to die without treatment. You will choose either comfort care which allows you to die peacefully, or you will choose life sustaining treatement which which means you will continue to be treated for your medical condition.

Most of us discuss what type of medical care we would want if we were in such a position, but a lot of us change our minds and say we would want some other type of treatment. I have been in the position of the family member wondering what my loved one wanted—and I remember them saying two different things. It would have made a horrible choice much easier on our family had our loved one created a Living Will. Please do this kindness for your family.

Declaration of Guardian: Remember Britney Spears’ conservatorship? That is called a guardianship in Texas. It is severe. You are stripped of all of your rights, so it is important you have a say in who serves as your guardian. That said, as long as your medical and financial power of attorneys are in place and working well, the court has no need to appoint a guardian over you. But if you lose one of the documents, or if one of the documents is challenged as a forgery, you risk being appointed a guardian if you can no longer care for yourself.

In this document, you will name those people you want to serve as your guardian of your person and guardian of your estate in the event you are the subject of a guardianship proceeding. The guardian of your person makes the daily living decisions, and the guardian of the estate makes financial decisions. One unique feature of this document is that you get to say who you do not want serving as guardian of your estate or person. Only a judge can appoint a guardian, and the court will strongly consider your nominations, but ultimately, the court has the sole authority to name a guardian of an adult.

Guardians of Minor Children: If you have minor children, you will name the guardians of their person and estate. The guardian of the person will make the daily living decisions, and the guardian of the estate will make financial decisions. You will also name the guardians of minor children in your will, but this doument can be used if you are incapacitated. The will is only used after you die.