When you begin the estate planning process, you may have numerous options for crafting your estate plan. But what legal documents should you incorporate into a comprehensive estate plan? Understanding your legal options can help you develop a comprehensive estate planning strategy that fulfills your objectives.
Last Will and Testament
First, a comprehensive estate plan should include a last will and testament. A will has several functions, including appointing an executor to administer your estate after your death, identifying beneficiaries who will inherit from you, and designating what estate assets they will receive. In Texas, a person typically must sign their will (or have someone sign it at their direction and in their presence) and have two witnesses sign the will in the presence of the person. However, a person can also create a valid holographic will, which refers to a will written entirely in the person’s handwriting, that does not require witnesses. A person may also create a self-proved will, which includes a self-proving affidavit signed by the person and the witnesses, and avoids the need for the will’s witnesses to testify to its validity in a probate proceeding.
Revocable Living Trust
A revocable living trust is a legal structure in which a person, called a trustee, manages assets placed in the trust by its creator (called a settlor) on behalf of beneficiaries designated by the settlor per the terms of the trust document executed by the settlor. Placing assets in revocable living trusts as part of an estate planning strategy can offer several benefits, including passing inheritances on to loved ones without the time, expense, or publicity associated with probate, and facilitating asset management by a trustee in the event of incapacity. Trusts may work best for individuals and families with high-value assets or complex estates.
Power of Attorney
In a power of attorney, you can appoint a trusted individual, called an agent or attorney-in-fact, to handle various legal, financial, or medical matters on your behalf. You can designate the scope of an agent’s authority to act on your behalf, specifying matters that your agent can or cannot handle. An agent’s authority begins once you execute a power of attorney. However, you can also create a “springing” power of attorney that starts the agent’s authority upon the occurrence of some event, such as your incapacity. You may also make a durable power of attorney to continue the agent’s authority after you become incapacitated.
Advance Healthcare Directive
Advance healthcare directives can include several documents in which you provide instructions for your medical or end-of-life care in case you become incapacitated and cannot communicate your wishes and preferences. Directives can include do-not-resuscitate orders, directives regarding life-sustaining care, and living wills that allow you to discuss other preferences or wishes regarding medical care. Texas provides standard advance healthcare directive forms.
Beneficiary and Pay/Transfer-on-Death Designations
Certain assets, such as life insurance policies, retirement accounts, brokerage accounts, and bank accounts, may allow you to make a beneficiary designation, pay-on-death designation, or transfer-on-death designation. These designations direct an insurer or financial institution to pay the benefits or funds in an asset to a designated beneficiary or to transfer ownership or control of the account to a beneficiary, allowing you to pass certain financial assets outside of probate.
Contact an Estate Planning Attorney Today
A comprehensive estate plan requires careful consideration of which documents to include to ensure that your plan carries out your wishes. Contact Carroll Law Group, PLLC, today for a confidential consultation with a wills and trusts lawyer to discuss which estate planning strategies you should incorporate into your estate plan to address your needs and achieve your objectives.