Many people assume that as long as they have a will, their estate planning is finished, however, there is much more that goes into creating a solid estate plan that will cover all of your interests. A good estate plan should include ways to avoid probate, ways to save on estate taxes, ways protect your assets if you ever need to move into a nursing home, and an appointee to act on your behalf if you become disabled.
At the very minimum, an estate plan should include the following two important panning tools:
- A Durable Power of Attorney
- A Will
Establishing a trust is also a useful way to avoid probate and to manage your estate while you are incapacitated or after you have passed away. In this blog, we explain 5 important things to include in your estate plan.
#1: A Will
A will is a legally-binding list of orders that dictates who will receive your property after you have died. Without a will in place, the state will decide who your property will be distributed to. A will also appoints a legal representative known as an executor to carry out your wishes in your absence. If you have minor children, it is crucial to get a will so that you can name a guardian who will care for them in the event that you die. A Will does not go into legal effect until it is admitted into probate by a Probate Court. Generally, if a will is not admitted into probate within four years after the date of death, then it is barred by Statute of Limitations.
#2: A Trust
A trust is a legal arrangement in which one person known as a "trustee," holds legal title to property for another person, called a "beneficiary." Trusts can help you avoid probate when you pass away. For example, if you setup a revocable living trust that expires when you die, any property contained in the trust will immediately pass to the beneficiaries. This can save a significant amount of time and money for the beneficiaries of an estate. Other types of trusts can be used to protect property from creditors, as well as to help the donor qualify for Medicaid. The majority of people do not have an Estate large enough to justify the preparation of a Trust document. You should consult with a Texas attorney to explore which legal avenue is best for you.
#3: Power of Attorney
Under a power of attorney, you are allowed to appoint your “attorney-in-fact” to make financial decisions if you become incapacitated. This person will handle all of your financial affairs for the duration of this period. If you do not have a durable power of attorney included in your estate plan, a court will have to appoint a conservator or guardian to handle your affairs. With a durable power of attorney, your attorney-in-fact can immediately implement your planning steps without having to seek permission from a court. A Power of Attorney terminates upon either your written revocation filed with the County Clerk or your death.
#4: Medical Directives
Your medical directives can include a number of different documents, such as a health care proxy, a durable power of attorney for health care, a living will, and medical instructions. Both a health care proxy and a durable power of attorney for health care let you appoint a person of your choosing to make health care decisions for you. This is crucial for situations in which people become terminally ill or are in a vegetative state. Broader medical directives can include the terms of a living will, but also gives instructions for when you are in a less serious state of health, but unable to direct the terms of your healthcare on your own.
#5: Beneficiary Designations
When you decide to begin planning your estate, you should take the time to make sure your retirement plan beneficiary designations are up to date as well. Without a beneficiary for your retirement accounts, the distribution of your benefits can end up being controlled by state or federal law. You can also list a person on your bank account as having joint rights of survivorship which gives them access to your accounts after your death.
At J. Roland Jeter, P.C., we are committed to helping families in Irving and surrounding communities get their estates in order. With nearly 40 years of extensive legal and trial experience, our attorney has the skills and resources that you need to ensure your assets and interests are fully protected. Let us help with your estate plan today.
Call (972) 330-4050 today to schedule a free 30-minute consultation with our legal team.