Wills and Trusts | Powers of Attorney | Advance Directives | Living Wills
You’ve worked hard to build an estate, so that your loved ones will be protected in the event of your death. It’s just as important that you take the right measures to put together a comprehensive estate plan, so that your loved ones have clear direction when transferring your assets. A well-conceived and executed estate plan will also alleviate their stress, making it one of the greatest gifts you can give.
What Do You Need to Have a Thorough Estate Plan?
Contrary to popular belief, while an estate plan will include instructions for the distribution of property after your demise, it will also provide guidance in the event you become incapacitated or unable to manage your own affairs. The essential components of a well-constructed estate plan include:
- A document that identifies how your assets will be passed on—a will or trust
- A document that identifies an agent to act on your behalf, should you be unable to—a power of attorney
- A document that designates who will have responsibility for making medical decision on your behalf, should you lack capacity—an advance directive
A Will or a Trust—What’s the Difference?
There are a number of ways to transfer your property to family, friends or others:
- You can retitle assets while you are living—you may, for example, create a new deed to your home, listing you and your children as joint tenants. In Texas, unlike most states, you must specifically state that the joint tenancy carries a right of survivorship. If you do, the property will automatically pass to the remaining joint tenants upon your death.
- You can make a gift of property during your lifetime—The annual gift must be less than $16,000 (in 2022) or you may incur a gift tax
- You can create a trust and transfer your property into the trust—A trust is a separate legal entity that has the power to own property. When you transfer property into a trust, you no longer own it—the trust does. Upon your death, the ownership doesn’t change (so the property in the trust won’t have to go through probate). All rights with respect to the property in the trust will typically be laid out in the terms of the trust.
- You can execute a last will and testament—A will is a written legal document that can address a number of issues—it can set forth the distribution of your property upon death, ensure that final debts are paid and tax returns filed, and identify who will be guardian of minor children or others in your care who need guardianship. The asset that pass through a will must go through the probate process.
What Is a Power of Attorney?
A power of attorney is a legally enforceable document that gives another person the power to act on your behalf. The person to whom that power is given is typically referred to as your agent. Powers of attorney come in a variety of forms:
- General powers of attorney allow the agent power to handle virtually all types of issues, including legal, financial and medical decisions
- Limited powers of attorney allow the agent to address only specific issues, such as only financial matters
- Durable powers of attorney—This type of POA remains in effect when the principal becomes incapacitated
What Will an Advance Directive Accomplish?
An advance directive is essentially a medical power of attorney, granting someone (the agent) the right to make medical decisions on your behalf. A living will (a type of advance directive) customarily includes your specific instructions about certain types of medical care. For example, it may include a “do not resuscitate,” or DNR, order, or it may state that you do not want to be put on artificial life support.
Contact the Experienced Estate Planning Attorneys at Bailey & Galyen
At the law office of Bailey & Galyen, we offer a free initial consultation to every client. To speak with a proven estate lawyer, contact us by e-mail or 844-402-2992 call our offices at one of the convenient locations listed below. We will take your call 24 hours a day, seven days a week.