ESTATE PLANNING BASICS

Estate planning is the process of anticipating and arranging, during a person's life, for the management and disposal of that person's estate during the person's life and after death, while minimizing gift, estate, generation skipping transfer, and income tax.  Estate planning includes planning for incapacity as well as a process of reducing or eliminating uncertainties over the administration of a probate and maximizing the value of the estate by reducing taxes and other expenses. The ultimate goal of estate planning can be determined by the specific goals of the client, and may be as simple or complex as the client's needs dictate. Guardians are often designated for minor children in estates with young children.


The Basic Documents for an estate plan are the following:

WILLS

Wills are a common estate planning tool, and are usually the simplest device for planning the distribution of an estate upon the Testator’s death.  If you a person dies intestate (without a will), their heirs will inherit your property, according to Texas statutes for intestate distribution.  For example, surviving spouses inherit their deceased spouses’ community property.  But what if your deceased spouse owned separate property?  Well, under Texas law, the distribution may be different than that of community property, depending on the makeup of the family.

POWER OF ATTORNEY FOR HEALTHCARE

In the field of medicine, a healthcare proxy (commonly referred to as HCP) is a document (legal instrument) with which a patient (primary individual) appoints an agent to legally make healthcare decisions on behalf of the patient, when the patient is incapable of making and executing the healthcare decisions stipulated in the proxy.

HIPAA RELEASE

This document allows family members and friends to access a patient’s medical care information. Medical privacy is a right that's protected by law.  This privacy can be opened by a patient signing a HIPAA release form that authorizes loved ones to receive information about a patient’s health.

DURABLE POWER OF ATTORNEY

A power of attorney (POA) or letter of attorney is a written authorization to represent or act on another's behalf in private affairs, business, or some other legal matter. The person authorizing the other to act is the principal, grantor, or donor (of the power). The one authorized to act is the agent, attorney, or in some common law jurisdictions, the attorney-in-fact.

DIRECTIVE TO PHYSICIANS

A living will (Directive to Physicians) usually provides specific directives about the course of treatment healthcare providers and caregivers are to follow. In some cases a living will may forbid the use of various kinds of burdensome medical treatment. It may also be used to express wishes about the use or foregoing of food and water, if supplied via tubes or other medical devices. The living will is used only if the individual has become unable to give informed consent or refusal due to incapacity. A living will can be very specific or very general. An example of a statement sometimes found in a living will is: "If I suffer an incurable, irreversible illness, disease, or condition and my attending physician determines that my condition is terminal, I direct that life-sustaining measures that would serve only to prolong my dying be withheld or discontinued."

DECLARATION OF GUARDIAN

A Declaration of Guardian is a legal document where a client tells the court who they want to serve as their guardian if there is ever a guardianship proceeding for them. There are two types of guardians: Guardian of your estate, and guardian of your person.

  • Guardian of the Estate:  The Guardian of a person’s estate is entitled to possess and manage your property including all of the assets in the client’s estate. The Guardian of the Estate will also enforce any obligation in favor of the client and bring and defend lawsuits by or against the client.

  • Guardian of the Person:  The Guardian of the person has the duty to provide care, supervision, and protection of the client. This includes providing clothing, food, medical care (i.e., decisions regarding operations, medications, and medical procedures and treatments) and shelter.

 

Ordinarily, a guardian of the estate will not be needed if a client has named an agent under a power of attorney for financial matters and a guardian of your person will not be needed if you have named an agent under a healthcare power of attorney. However, it is important to know that a Guardianship trumps a Power of Attorney. Therefore, if a Guardianship of the Estate is granted by a Court, the named Guardian of the Estate shall replace the agent named in the Durable Power of Attorney. Likewise, if a Guardianship of the Person is granted by a Court, the named Guardian of the Person will supersede the agent named in the Medical Power of Attorney. The person(s) named will only serve if the client becomes incapacitated.

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