Houston Estate Planning and Probate Blog
Thursday, June 06, 2013
People. The Essential Component of Your Estate Plan’s Success
Properly drafted estate planning documents are integral to the success of your legacy and end-of-life wishes. Iron-clad estate planning documents, written by a knowledgeable attorney can make the difference between the success and failure of having your wishes carried out. However, there’s more to estate planning than paperwork. For your wishes to have the best chance of being honored, it is important to carefully choose the people who will carry them out.
Your estate plan can assign different responsibilities to different people. The person who you most trust to raise your children, for example, may not be the person you’d designate to make health care decisions on your behalf, if you are incapacitated. Before naming individuals to carry out your various estate and incapacity planning wishes, you should carefully consider the requirements of each role and the attributes which each individual has that will allow him or her to perform the duties effectively.
Executor. You name the executor, (also known as a personal representative), in your will. This person is responsible for carrying out all the terms of your will and guiding your will through probate, if necessary. The executor usually works closely with a probate or estate administration attorney, especially in situations where will contests arise and your estate becomes involved in litigation. You may appoint co-executors, or name a professional – such as a lawyer or accountant – as the co-executor.
Health care agent. Your health care agent is the person you name to make medical decisions for you in the event you are incapacitated and unable to do so yourself. In addition to naming a health care agent (sometimes called a health care power of attorney or medical power of attorney), most people also create a living will (or health care directive or directive to physicians), in which they directly state their wishes for medical care and end-of-life care in the event of incapacity. When choosing a health care agent, select a person who you know understands your wishes regarding medical care, and who you trust to carry out those wishes, even if other family members disagree. You should also consider individuals who have close geographic proximity to you as well as persons you believe can make difficult decisions under pressure.
Power of attorney. A financial power of attorney (or simply power of attorney) is different from a health care or medical power of attorney in that it gives another person the authority to act on your behalf in financial, property and legal matters. You can limit the areas in which the person may act, or you may grant unlimited authority. A power of attorney may also be limited for a specific time, or it may be a durable power of attorney, in which case it will continue even after the onset of incapacity (until your death). A power of attorney can take effect immediately or “spring” into effect in the event of incapacity.
Guardians. If you have minor children or other dependents (disabled adult children or other disabled adults for whom you are the named guardian), then your estate plan should name a person or persons to take over the parental role in the event of your death. The guardian may also have control over any assets that you leave directly to your minor children or other dependents. If you create a trust for the benefit of your minor children, then the trust’s trustee(s) will have control over those assets and their distribution. Important considerations include age of the guardian, compatibility with his or her personality and moral values as well as the extent and quality of the existing relationship with your children.
Trustee. If you place any assets in trust as part of your estate plan, then you must designate one or more trustees, who will act as the legal owners of the trust. If you do not wish to appoint someone you know personally, you may appoint a corporate trustee – often a bank or trust company – to play this role. Some clients choose corporate trustees because they are financial professionals and neutral, objective third parties. It’s important you select individuals who are not only trustworthy but also organized, diligent and detail oriented.
Thursday, February 14, 2013
The ‘Sandwich Generation’ – Taking Care of Your Kids While Taking Care of Your Parents
“The sandwich generation” is the term given to adults who are raising children and simultaneously caring for elderly or infirm parents. Your children are one piece of “bread,” your parents are the other piece of “bread,” and you are “sandwiched” into the middle.
Caring for parents at the same time as you care for your children, your spouse and your job is exhausting and will stretch every resource you have. And what about caring for yourself? Not surprisingly, most sandwich generation caregivers let self-care fall to the bottom of the priorities list which may impair your ability to care for others.
Following are several tips for sandwich generation caregivers.
Hold an all-family meeting regarding your parents. Involve your parents, your parents’ siblings, if any, and your own siblings in a detailed conversation about the present and future. If you can, make joint decisions about issues like who can physically care for your parents, who can contribute financially and how much, and who should have legal authority over your parents’ finances and health care decisions if they become unable to make decisions for themselves. Your parents need to share all their financial and health care information with you in order for the family to make informed decisions. Once you have that information, you can make a long-term financial plan.
Hold another all-family meeting with your children and your parents. If you are physically or financially taking care of your parents, talk about this honestly with your children. Involve your parents in the conversation as well. Talk – in an age-appropriate way – about the changes that your children will experience, both positive and challenging.
Prioritize privacy. With multiple family members living under one roof, privacy – for children, parents, and grandparents – is a must. If it is not feasible for every family member to have his or her own room, then find other ways to give everyone some guaranteed privacy. “The living room is just for Grandma and Grandpa after dinner.” “Our teenage daughter gets the downstairs bathroom for as long as she needs in the mornings”, etc. etc.
Make family plans. There are joys associated with having three generations under one roof. Make the effort to get everyone together for outings and meals. Perhaps each generation can choose an outing once a month.
Make a financial plan, and don’t forget yourself. Are your children headed to college? Are you hoping to move your parents into an assisted living facility? How does your retirement fund look? If you are caring for your parents, your financial plan will almost certainly have to be revised. Don’t leave yourself, and your spouse, if you are married, out of the equation. Make sure to set aside some funds for your own retirement while saving for college and elder health care.
Revise your estate plan documents as necessary. If you had named your parents guardians of your children in case of your death, you may need to find other guardians. You may need to set up trusts for your parents as well as for your children. If your parent was your power of attorney, you may have to designate a different person to act on your behalf.
Seek out and accept help. Help for the elderly is well organized in the United States. Here are a few governmental and nonprofit resources:
www.benefitscheckup.org – Hosted by the National Council on Aging, this website is a one-stop shop for determining which federal, state and local benefits your parents may qualify for
www.eldercare.gov – Sponsored by the U.S. Administration on Aging
www.caremanager.org -- National Association of Professional Geriatric Care Managers
www.nadsa.org – National Adult Day Services Association
Monday, January 21, 2013
2013 Changes to Federal Estate Tax Laws
Changes to income taxes grabbed the lion’s share of the attention as the President and Congress squabbled over how to halt the country’s journey towards the “fiscal cliff.” However, negotiations over exemptions and tax rates for estate taxes, gift taxes and generation-skipping taxes also occurred on Capitol Hill, albeit with less fanfare.
The primary fear was that Congress would fail to act and the estate tax exemption would revert back down to $1 million. This did not happen. The ultimate legislation that was enacted, American Taxpayer Relief Act of 2012, maintains the $5 million exemption for estate taxes, gift taxes and generation-skipping taxes. The actual amount of the exemption in 2013 is $5.25 million, due to adjustments for inflation.
The other fear was that the top estate tax rate would revert to 55 percent from the 2012 rate of 35 percent. The top tax rate did rise, but only 5 percent from 35 percent to 40 percent.
The American Taxpayer Relief Act of 2012 also makes permanent the portability provision of estate tax law. Portability means that the unused portion of the first-to-die spouse’s estate tax exemption passes to the surviving spouse to be used in addition to the surviving spouse’s individual $5.25 million exemption.
Some Definitions and Additional Explanations
The federal estate tax is imposed when assets are transferred from a deceased individual to surviving heirs. The federal estate tax does not apply to estates valued at less than $5.25 million. It also does not apply to after-death transfers to a surviving spouse, as well as in a few other situations. Many states also impose a separate estate tax, but Texas does not.
The federal gift tax applies to any transfers of property from one individual to another for no return or for a return less than the full value of the property. The federal gift tax applies whether or not the giver intends the transfer to be a gift. In 2013, the lifetime exemption amount is $5.25 million at a rate of 40 percent. Gifts for tuition and for qualified medical expenses are exempt from the federal gift tax as are gifts under $14,000 per recipient per year.
The federal generation-skipping tax (GST) was created to ensure that multi-generational gifts and bequests do not escape federal taxation. There are both direct and indirect generation-skipping transfers to which the GST may apply. An example of a direct transfer is a grandmother bequeathing money to her granddaughter. An example of an indirect transfer is a mother bequeathing a life estate for a house to her daughter, requiring that upon her death the house is to be transferred to the granddaughter.
Tuesday, January 08, 2013
Preparing Your Family for an Emergency during School Hours
Every family should establish a clear plan to handle an emergency that occurs during school hours. Unfortunately, many parents mistakenly believe that filling out the school’s emergency card is sufficient. Sadly, this practice falls far short of what is truly necessary to protect your children in the event something tragic happens to you during the school day.
Even with a fully-completed school emergency card, your children could still spend time “in the system.” The emergency card only gives permission for certain named individuals to pick up your children if they are sick, but does not authorize them to take short-term custody if one or both parents are killed or become incapacitated. Without having alternate arrangements in place, children in this situation would likely end up spending at least some time with social services.
Parents should create an emergency plan, to avoid confusion and ensure their children are in the right hands if tragedy strikes. With just a few simple steps, parents can rest easy knowing their children will be cared for in the manner they choose.
Name Temporary Guardians
Parents should name short-term guardians who have legal permission to care for their children until a parent or other long-term guardian is available to take over. This individual should be someone who lives nearby and can aid and comfort your child in an emergency. You can establish this temporary guardianship arrangement by completing a temporary guardianship agreement or authorization, preferably, with the assistance of a qualified attorney.
Make Sure the Temporary Guardians are Also Named on the School Emergency Card
In addition to listing neighbors or friends who are authorized to pick up your children from school, it is also vital that you list the full contact information for your authorized temporary guardians. In the event of a true emergency, this guardian can step in immediately to care for your children. Otherwise, your kids may wind up in the custody of social services until a parent or other named legal guardian can be located.
Ensure the Babysitter Knows the Plan if You Don’t Return Home
Make sure you give your babysitters detailed instructions regarding who to call or what to do in the event you are unexpectedly absent. Without this information, many babysitters will panic and contact the police. Involving law enforcement will also involve social services who may step in and take temporary custody of your children until a long-term guardian or parent arrives.
These three simple steps will make all the difference for your children and their caregivers in the event the unthinkable happens. In times of tragedy, the last thing you want is for your little ones to end up in the system, rather than the loving arms of a trusted friend or relative.
Wednesday, December 19, 2012
Preparing to Meet With an Estate Planning Attorney
A thorough and complete estate plan must take into account a significant amount of information about your assets, your family, your property, and your wishes during and after your life. When you make your first appointment with an estate planning attorney, ask the attorney or the paralegal if they can provide a written list of important information and documents that you should bring to the meeting. It is a common practice in our office to send out a packet of information which includes a rather lengthy questionnaire which we ask that our clients complete and return to us prior to our first meeting. That way, when we meet, we will already be familiar with our client’s family, finances and goals and objectives.
Generally speaking, if your attorney does not provide you with a questionnaire to complete, you should gather the following information before your first appointment with your estate planning lawyer.
List the names, birth dates, death dates, and ages of all immediate family members, specifically current and former spouses, all children and stepchildren, and all grandchildren.
If you have any young or adult children with special needs, gather all information you have about their lifetime financial needs.
For all real property you own or can reasonably expect to acquire, gather the property description, your ownership interest information, the address, market value, any outstanding mortgage balance, and the most recent tax assessment.
For any personal property of value (such as vehicles, jewelry, coins, antiques, stamps, and art), compile a list that includes a description, the physical location of each item, your ownership interest information, the market value, and any liens against the property.
If you have an ownership interest in a business, make sure you have documents showing your ownership interest in the business, the business location, the names and contact information of other owners, and 2-3 years of past profit and loss statements.
Compile a list of all your financial accounts, including: checking accounts, savings accounts, investment accounts, stocks and bonds, and U.S. Treasury notes. If any of these accounts currently have designated beneficiaries, bring that information as well.
Gather all retirement savings information, including 401(k) plans, 403(b) plans, IRAs, life insurance policies, Social Security statements, and pension information. Make sure you have the account names, account numbers, current balances, outstanding loan balances, and currently named beneficiaries.
If any family members owe you debts, compile that information.
Questions to Think About
The following are some of the first questions your estate planning attorney will ask. You are not required to have answers ready for all these questions, but because some of them are complex, it is a good idea to think through these issues before your appointment.
Who will be beneficiaries of your property?
Do you want to bequeath any specific items of property to specific individuals?
Is there anyone you do not want to be a beneficiary of any of your property?
Do you plan to make any bequests to any nonprofit organizations – university, church, synagogue, charity, or other organization?
Do you know who you want to act as executor of your will?
Do you know who you want to act as trustee of any trusts you establish?
If you have minor children, who do you want to appoint as guardian?
Do you know who you want to serve as your agent to make health and financial decisions for you in the event you become unable to make decisions for yourself?
Do you have specific wishes for your funeral?
Are you a registered organ donor?
During your initial consultation, your estate planning attorney will review your family and financial situation, discuss your wishes, answer your questions and suggest strategies and planning options to protect your family, wealth and legacy.
Monday, December 10, 2012
Medicare vs. Medicaid: Similarities and Differences
With such similar sounding names, many Americans mistake Medicare and Medicaid programs for one another, or presume the programs are as similar as their names. While both are government-run programs, there are many important differences. Medicare provides senior citizens, the disabled and the blind with medical benefits. Medicaid, on the other hand, provides healthcare benefits for those with little to no income.
Overview of Medicare
Medicare is a public health insurance program for Americans who are 65 or older. The program does not cover long-term care, but can cover payments for certain rehabilitation treatments. For example, if a Medicare patient is admitted to a hospital for at least three days and is subsequently admitted to a skilled nursing facility, Medicare may cover some of those payments. However, Medicare payments for such care and treatment will cease after 100 days or if the patient stops improving.
Nursing home patients often find their Medicare payments are terminated much sooner than 100 days. If a patient’s condition stops improving, Medicare coverage will be discontinued. For example, many older Americans are suffering from diseases with no known cure, such as Parkinson’s or Alzheimer’s Disease. Accordingly, it is simply impossible to “rehabilitate” these patients so Medicare typically denies skilled nursing facility coverage in these types of situations.
Medicare provides health insurance for those aged 65 and older
Medicare is regulated under federal law, and is applied uniformly throughout the United States
Medicare pays for up to 100 days of care in a skilled nursing facility
Medicare pays for hospital care and medically necessary treatments and services
Medicare does not pay for long-term care
To be eligible for Medicare, you generally must have paid into the system
Overview of Medicaid
Medicaid is a state-run program, funded by both the federal and state governments. Because Medicaid is administered by the state, the requirements and procedures vary across state lines and you must look to the law in your area for specific eligibility rules. The federal government issues Medicaid guidelines, but each state gets to determine how the guidelines will be implemented.
Medicaid is a health care program based on financial need
Medicaid is regulated under state law, which varies from state to state
Medicaid will cover long-term care
Wednesday, November 21, 2012
Annual Year End Gifts
If you’re like most people, you want to make sure you and your loved ones pay the least amount of tax possible. Many use simple year-end gift giving as a way to transfer wealth to younger generations and also reduce the overall potential estate tax that will be due upon their death. Below are some steps you can take to make small gifts, within the exemption amount, to your heirs without triggering any gift tax liability. Some of these techniques may also reduce your own income tax liability.
A combination of estate and gift tax exemptions can be used to significantly reduce the overall tax liability of your estate. Upon your death, federal estate tax may be owed. A portion of your estate is exempt from the tax. That exemption amount is set by Congress and can change from year to year. For deaths that occur in 2011 the exemption amount is $5 million and for deaths that occur in 2012 the exemption amount is indexed at $5.12 million, and the value of an estate in excess of the respective amount is subject to estate tax.
Many taxpayers make annual gifts to loved ones during their lifetimes, to reduce the overall value of the estate so that it does not exceed the exemption amount in effect at the time of death. It is important to consider that gifts made during your lifetime are subject to a gift tax (equal to the estate tax). However, certain gifts or transfers are not subject to the gift tax, enabling you to make tax-free gifts that benefit your loved ones and reduce the overall taxable value of your estate upon your death.
The annual gift tax exclusion allows each individual to make annual gifts of up to $13,000 to each recipient without even having to file a gift tax return. There is no limit to the number of recipients who may each receive up to $13,000 totally tax-free. Married couples may gift up to $26,000 to each recipient without triggering any tax liability. This annual exclusion expires on December 31 of each year, and larger gifts may be made by splitting it up into two payments. By making a payment in December and one the following January, you can take advantage of the gift tax exclusion for both years. Keeping annual gifts below $13,000 per recipient ensures that no gift tax return must be filed, and that there is no reduction in the estate tax exemption amount available upon your death.
Annual gifts may also be made in the form of contributions to a §529 College Savings Plan. These, too, are subject to the $13,000 annual gift tax exclusion. Additionally, such contributions may afford the giver with a state tax deduction.
Payment of a beneficiary’s medical expenses is also excluded from the gift tax. There is no limit to the amount of medical expense payments that may be excluded from tax. To qualify, the payment must be made directly to the health care provider and must be the type of expenses that would qualify for an income tax deduction.
If you have a large estate that may be subject to taxes upon your death, making annual gifts during your lifetime can be a simple way to reduce the size of your estate while avoiding negative tax consequences.
Wednesday, November 07, 2012
Utilizing Family Limited Partnerships as Part of Your Estate Plan
Designed to preserve family businesses for future generations, Family Limited Partnerships (FLPs) can help shelter your assets and reduce overall estate and gift taxes. FLPs are commonly used as part of business succession planning, business continuity plans, and often serve as an integral component of an estate plan for high net worth individuals.
A Family Limited Partnership is typically established by married couples who place assets in the FLP and serve as its general partners. They may then grant limited-partnership interests to the children, of up to 99% of the value of the FLP’s assets. When this occurs, the assets are removed from the general partners’ estates, thus saving on future estate taxes. The general partners keep control of the FLP and its assets, even though they may own as little as just 1% of the asset value.
Limited partners may receive distributions from the FLP, and enjoy certain tax benefits. Asset protection is another attractive feature of the FLP. The partnership’s assets are shielded from the limited partners’ creditors. The interests in a FLP can be easily divided among family members, who may each own different amounts. The FLP enables ownership of a business to transfer to the younger generation, while allowing the senior generation to continue conducting operations and mentoring and grooming the young owners.
One of the significant benefits of a properly established and maintained FLP is that it can reduce the value of gifts to your children and grandchildren. The value of each limited partnership interest which you give away decreases the value of your taxable estate and, consequently, any tax which your heirs would have to pay upon your death. The gifts are made using the annual gift tax exclusion, so you may not have to pay any gift tax on the transfer.
Since limited partners do not have the ability to direct or control the day-to-day operation of the partnership, a minority discount can be applied to reduce the value of the limited partnership interests which you are gifting. Therefore, the value of the partnership interests transferred to your beneficiaries may be far less than the corresponding value of the assets in the partnership. Furthermore, because the partnership is a closely-held entity and not publicly-traded, a discount can be applied based upon the lack of marketability of the limited partnership interest. This allows you to leverage the FLP as a vehicle to transfer more wealth to your beneficiaries, while retaining control of the underlying assets.
With these significant tax benefits, it’s no surprise that many FLPs have attracted scrutiny from the IRS. Others have run into various problems due to mistakes or outright abuse. Care must be taken to ensure your FLP is properly established and operated. Specifically, the IRS may look at the following issues when assessing the viability of the FLP:
It’s not all about taxes. You stand a better chance of avoiding – or surviving – a challenge from the IRS if you can show a significant, legitimate non-tax-related reason the FLP was created. Tax savings are an important consideration, but you must be able to demonstrate that there are other reasons, as well.
Keep your personal assets out of the FLP. You can reasonably expect to transfer closely held stock or interests in commercial real estate into a Family Limited Partnership. However, personal property such as cars or residences will not fare well against an IRS challenge. Similarly, the FLP’s assets should not be used to pay for any personal expenses. The FLP must be a legitimate business entity operated to fulfill business purposes.
Have your FLP’s assets professionally appraised. Partners or family members should not determine the valuations or discounts for any assets transferred into the FLP. A qualified appraiser has a much better chance of withstanding IRS scrutiny.
Don’t push it. Many are tempted to put as many assets into the FLP as possible, to maximize the asset protection and tax savings benefits. Unfortunately, if the FLP is successfully challenged, a significant portion of a partner’s net worth could be vulnerable to taxes or lawsuits.
Thursday, November 01, 2012
Estate Planning for Unmarried Couples
Estate planning is important for everyone. We simply don’t know when something tragic could happen such as sudden death or an accident that could leave us incapacitated. With proper planning, families who are dealing with the unexpected experience fewer headaches and less expense associated with managing affairs after incapacity or administering an estate after death.
If a person fails to do any planning and becomes involved in a debilitating accident or passes away, each state has laws that govern who will inherit assets, become guardians of minor children, make medical decisions for an incapacitated person, dispose of a person’s remains, visit the person in the hospital, and more. In some states, the spouse and any children are given top priority for inheritance rights. In the case of incapacity, spouses are normally granted guardianship over incapacitated spouse, though this requires a lengthy and expensive guardianship proceeding.
In today’s world, increasing numbers of couples are choosing to spend their lives together but aren’t getting married, either because they aren’t allowed to under the laws of their state, such as in the case of gay and lesbian couples, or simply because they choose not to. However, most states don’t recognize unmarried partners as spouses. In order to be given legal rights that married couples receive automatically, unmarried couples need to do special planning in order to protect each other.
In general, unmarried individuals need four basic documents to ensure their rights are protected:
A Will – A will tells who should inherit your property when you pass away, and who you want your executor to be. These issues are all especially important for unmarried individuals. In most states, an unmarried partner does not have inheritance rights, so any property owned by his or her deceased partner would go to other family members.
Designation of Guardian for Minors (if applicable) – Sometimes this provision is contained within the will, but often it is provided for in a separate document. In the case of many gay and lesbian couples, the living partner is not necessarily the biological or adoptive parent of any minor children, which could lead to custody disputes in an already very difficult time. Therefore, it’s critical to nominate guardians for minor children.
A power of attorney – A power of attorney (for financial matters) dictates who is authorized to manage your financial affairs in the event you become incapacitated. Otherwise, it can be very difficult or impossible for the non-incapacitated partner to manage the incapacitated partner’s affairs without going through a lengthy guardianship or conservatorship proceeding.
Advance healthcare directives – A power of attorney for healthcare/medical power of attorney, informs caregivers as to who is responsible for making healthcare decisions for someone in the event that a person cannot make them for himself, such as in the event of a serious accident or a condition like dementia. Another document, called a living will or a directive to physicians and family or surrogates, provides directions on life support issues and end of life decisions. Another important document is a HIPAA Authorization which allows certain people to have access to your confidential medical information.
Estate planning is undoubtedly more important for unmarried couples than those who are married, since there aren’t built-in protections in the law to protect them and their loved ones. It’s imperative that unmarried couples establish proper planning to avoid undue hardship, expense and aggravation.
Friday, September 28, 2012
Remarried? Protect Your Children With Proper Planning
If you are married for the first time and are working on your estate plan, the decisions about where the assets go are usually easy. Most parents in that situation want their entire estate to go to the surviving spouse, and upon the death of the surviving spouse, equally to their children. There may be difficult decisions about who will serve as guardians of the children or trustees over the children’s property, but typically it’s easy to decide where the property will go.
However, in today’s society, there are ever-increasing numbers of blended families. There may be children from several marriages involved, making estate planning more complex. Couples may bring an unequal number of children into the marriage, as well as unequal assets. A spouse may want to ensure that his or her spouse is provided for at death, but may be afraid to leave everything to that spouse out of fear that at the death of the second spouse, that spouse will leave everything to his or her biological children.
Planning can also be complicated when a couple gets married and either of them brings very young children into the marriage. The non-biological parent may raise those children, but unless formally adopted, for estate planning purposes, they are not considered the children of the non-biological parent. Therefore, if that parent dies without a will, the children will not inherit from the stepparent.
There are many options for estate planning for blended families that will treat everyone fairly. First, it’s imperative that parents of blended families have a will in place. If they don’t, it’s almost inevitable that someone will be treated unfairly. Also, it’s tempting for parents of blended families to create wills in which half of everything is left to the husband’s children and half is left to the wife’s children. However, as explained earlier, this approach can also lead to problems. Moreover, it’s not at all uncommon for a surviving spouse to change his or her will at the death of the first spouse and cut the stepchildren out of the estate plan.
While there may be many planning options, there are two options often recommended for blended families when doing estate planning. The first is to use a trust. Under this plan, all family assets are usually held in trust. Upon the death of the first spouse, the surviving spouse has the right to use the assets in the trust for support, with certain limits, such as rights to income or limited use of the trust principal for living expenses. However, the surviving spouse will not be able to change the beneficiaries of the trust, and hence stepchildren could not be disinherited. A second option is for a certain amount of money to be left to children at the death of the first spouse. In that situation, the children will not have to wait for the death of the stepparent in order to inherit. This works well in situations when the children are mature adults and there is sufficient money for the surviving spouse to support herself without relying on the extra funds that are inherited by the children. One way to accomplish this is through a life insurance policy payable to the children or payable to a trust for the benefit of the children.
Estate planning with blended families can be complex and each situation is unique. It’s important to keep the lines of communication open and to be aware that it can be a sticky situation for many families. However, with proper planning, many issues that could arise on the death of a stepparent can be avoided completely.
Thursday, July 19, 2012
A Living Will or Health Care Power of Attorney? Or Do I Need Both?
Many people are confused by these two important estate planning documents. It’s important to understand the functions of each and ensure you are fully protected by incorporating both of these documents into your overall estate plan.
In Texas, a Directive to Physicians and Family or Surrogates, commonly referred to as a “living will,” and often called an advance health care directive, is a legal document setting forth your wishes for end-of-life medical care, in the event you are unable to communicate your wishes yourself. The safest way to ensure that your own wishes will determine your future medical care is to execute an advance directive stating your wishes for the future. In some states, the advance directive is only operative if you are diagnosed with a terminal condition and life-sustaining treatment merely artificially prolongs the process of dying, or if you are in a persistent vegetative state with no hope of recovery.
A health care or medical power of attorney is a document in which you name another person to serve as your health care agent. This person is authorized to speak on your behalf in order to consent to – or refuse – medical treatment if your doctor determines that you are unable to make those decisions for yourself. A medical power of attorney can be operative at any time you designate, not just when your condition is terminal.
For maximum protection, it is strongly recommended that you have both a living will and a medical power of attorney. The power of attorney affords you flexibility, with an agent who can express your wishes and respond accordingly to any changes in your medical condition. Your agent should base his or her decisions on any written wishes you have provided, as well as familiarity with you. The advance directive is necessary to guide health care providers in the event your agent is unavailable and to assist in making your end of life decisions consistent with your wishes. If your agent’s decisions are ever challenged, the advance directive can also serve as evidence that your agent is acting in good faith and in accordance with your wishes.
Law Offices of Elyssa M. Schnurr focus their practice on Estate Planning, Wills and Trusts of all degrees of complexity, Probate, Estate Administration & Business Entity Formation. They are also available to assist with Uncontested Divorces and Mediation. They serve clients throughout the greater Houston area, including, but not limited to Houston, Bellaire, West University, Sugar Land, Missouri City, Richmond, Rosenberg, Katy, Cypress, The Woodlands, Kingwood, League City, Webster, Clear Lake, Pearland, Angleton, and throughout Harris County, Fort Bend County, Montgomery County, Brazoria County and Galveston County.