What should be included in an estate plan?

Have you thought about what will happen to you and your property if you get sick or have a bad accident and can no longer care for yourself, your family, or your property? People who have never given thought to what they would desire for themselves if a sudden incapacity occurs, and who have failed to put a good estate plan in place to take care of such decision making, will have a judge making that decision for them through the creation of a guardianship.

While Texas law favors the appointment of family as a guardian first, sometimes family members cannot serve. If that happens, a judge usually appoints a neutral third party (often someone that the family does not know) to serve as guardian of the person and the estate of the incapacitated person. Sometimes, the judge may appoint a bank to manage a ward’s estate. Most often, though, a guardianship can be avoided entirely by putting an estate plan in place long before the need arises.

A good estate plan should include the following documents:

1.  Will that is updated from time to time;
2. A Statutory Durable Power of Attorney naming a trusted person to handle property and finances should incapacity occur;
3. A Medical Power of Attorney naming a trusted person to handle medical decisions should incapacity occur (this person can be the same as number two above, but it can also be a different person);
4. A Health Insurance Portability and Accountability Act Release (commonly called a HIPAA Release) so that your doctor is released to talk with the person you named as agent in your Medical Power of Attorney about your medical condition and treatment options;
5. A Designation of Guardian in the Event of Later Need that designates the same person as the agent in your Statutory Durable Power of Attorney to be the guardian of your estate, and the same person named as agent in your Medical Power of Attorney to be the guardian of your person (by doing so, it will be more difficult for anyone to do an “end run” around your estate plan and it helps the judge to find a “least restrictive alternative” to creating a guardianship for you); and
6. A Directive to Physicians sometimes referred to as a living will, tells your family what you want for your medical treatment if you are unable to do so yourself.

You can download many of the above documents from the Internet and make your estate plan, but should you? The law is fluid and ever-changing, but that is not necessarily true for “forms” downloaded from the Internet. The Texas legislature meets every two years to make new statutes.

The legislature can, and has, changed many of the drafting rules for the documents discussed above. The Texas courts also issue opinions every week, interpreting the meaning of our Texas statutes and the meaning of the words that people use in their estate planning documents. These opinions could change the outcome of what was intended. New laws could even change how your documents should be executed. Estate plans that were properly drafted under “then-current law” are “grandfathered in” (meaning they are given full effect) when new laws are made, but that is not true for documents that are made using “old law” (laws that have been repealed, changed, or no longer exist). It is best to consult an attorney to assist you with preparing your estate plan. You can then be confident that your documents will comply with the law in place on the date you execute your estate plan.