Estate Documents give you the opportunity to tell the Courts, Doctors, Hospitals, Financial Institutions, and Loved Ones what your wishes are when you become unable to express them. This could be due to death, serious illness, injuries, etc. The tabs below provide an explanation for each of the common estate planning documents.
A will is the most well-known estate document. With a will, you can leave your belongings to whomever you wish, make provisions for your children, and even set up a trust – or trusts – to have some say in what happens to your assets for years after you pass away. Passing away without a will can lead to undesired results. If you don’t leave a will, the government and the courts determine how your belongings are distributed.
A will is a powerful document. When properly executed it can prevent conflict for surviving family members. For example, it can establish who gets the house, and who gets the oil and gas royalties so the family members do not fight over those assets.
Failing to leave a will can also lead to undesirable results. For example, the Texas Probate Code determines how the estate is distributed to heirs if no will is present. The Probate Code does not divide assets the way many people assume it will. The way the Probate Code distributes the estate can leave your surviving spouse in a financial pickle if you do not leave a will.
Directive to Physicians
This is commonly referred to as a ‘Living Will”. With this document, you let your family and physicians know what you want them to do if you are in a vegetative state with no chance of recovery. Without this document, you leave it to the government and/or your family to decide.
Medical Power of Attorney
This document appoints an agent to make medical decisions for you. Quite often it will only come into effect if and when you become incapacitated and cannot make medical decisions for yourself. Also, you can leave instructions on what your agent should do in certain situations.
Durable Power of Attorney
This document appoints an agent to handle your financial decisions for you should you become incapacitated and unable to make your own financial decisions. Like the Medical Power of Attorney, you can leave instructions for the agent and limit the agent’s powers.
Deposition of Remains
This will let your loved ones know what you want done with your remains once you pass away and appoints an agent to see that it is done. Whether you choose to be buried beside your deceased spouse, wish to be cremated and have your ashes spread over Yankee Stadium, or to have a Viking funeral, this is the document where you describe your intentions.
There are many types of trusts and they can be simple or extremely complex. Think of a trust as an ‘entity’ that will own some or all of your assets and possessions. Since you no longer own them, they will not pass through your will at the time of death, but rather through the trust instrument. They may also be protected from creditors depending on a number of factors. Even though the assets are owned by the Trust, they are held for your benefit (or the benefit of another if you choose). The person in charge of the trust assets is called the ‘Trustee’. That could be yourself or another person. Some trusts are revocable (you can cancel them and recover your assets) and some are irrevocable. Trusts are not for everyone and the type of trust a person needs will depend on many factors.
How Important is it to Have a Professionally Drafted Will?
Too many people avoid drafting a will thinking they will get to it some day. Some think they can save money by doing it themselves. Texas allows people to draft their own wills, but because someone CAN draft his or her own will, does not mean he or she SHOULD do so. A poorly drafted will can cost your estate a lot more money when it is time to Probate the will (or administer the estate without a will). A poorly drafted will can actually cause conflict between heirs since there can be significant disagreement about the intent of the deceased. Furthermore, if the will does not comply with the requirements in the statute, the court will reject the will and treat the estate as if no will had ever existed. The laws of intestacy (how property is distributed when someone dies without a will) are complex and are subject to change. You need a properly written will – as well as an understanding of what does not pass under a will – to know that your wishes will be followed.