Estate Planning Essentials
Estate planning does more than distribute assets upon death. An experienced estate planning attorney can protect people from financial fraud, appoint a trusted decision-maker in case of incapacity, identify care wishes and planning priorities, preserve and protect assets, and manage tax liabilities. A comprehensive estate plan protects you and your family.
Why Does Everyone Need a Last Will?
A Last Will and Testament specifies who should inherit your assets, and who will be in charge of distributing them (your executor) according to your wishes. The executor is responsible for everything from obtaining death certificates and establishing an estate bank account to paying taxes and distributing assets. The Last Will is also used to nominate a Guardian for minor children or disabled adults. Without a properly drafted and filed Last Will, the State of Texas will determine who should inherit your assets, and how they should be distributed, based on state statute. Without a Last Will, your loved ones will have to endure a complicated, time consuming, and expensive probate process.
How Can an Estate Plan Protect During Life?
In Texas, a Power of Attorney for Healthcare names another person to act as your healthcare Agent if you are incapacitated. Your Agent has authority to make medical decisions while you are incapacitated – whether for a short time (IE during surgery when heavily medicated) or on a longer-term basis, like after a severe stroke, or cognitive impairment. Other helpful medical forms may include a General HIPAA Release, MOLST (Medical Orders for Life-Sustaining Treatment) form, Out-of-Hospital DNR (Do Not Resuscitate) form and a Living Will.
Another reason to have these documents in place is to remove any questions about what medical care you want if you are incapacitated. Asking loved ones to make life-or-death decisions without the benefit of these documents imposes a terrible burden on them. The Power of Attorney for Healthcare appoints your Agent, and the Living Will or Directive to Physicians tells them about your wishes for care.
Everyone over age 18 should have a Durable Financial Power of Attorney. This empowers another person, known as the agent to manage financial and legal matters in case of your incapacity.
In the absence of these documents, the family will need to petition the court to obtain guardianship of the person for medical decisions and guardian of the estate for financial and legal decisions. These are lengthy, arduous, and expensive processes that can be easily avoided with proper estate planning. What if the court names a person on your behalf whom the family knows to be untrustworthy or names a professional conservator whose fees are out of control? Preparing these documents in advance is a far wiser and simpler solution.
How Can an Estate Plan Protect My Assets?
An estate plan created by an experienced estate planning attorney often includes trusts that are used to transfer assets out of direct personal ownership and place them under a trust, which is a separate legal entity. A trust can control how and when assets are distributed to beneficiaries and determine how the funds are used, all without the need for probate. If the trust is an irrevocable trust, then trust assets may be protected from future creditors.
Ownership of privately held companies and real estate properties is often coordinated with the estate plan through the creation of partnerships and other corporate structures. Family Limited Partnerships and Limited Liability Companies are commonly used to create a shared ownership structure, transfer wealth out of the estate and distribute interests in the FLP or LLC upon the death of the original owners.
A family-owned business should create an estate plan in conjunction with a succession plan. Doing one without the other could undermine both.
Why Should Everyone Have an Estate Plan?
Regardless of the size of the estate, having an estate plan is necessary to protect yourself and loved ones from the inevitable events of life and to make their lives easier upon your death. Completing this task provides peace of mind and allows you to turn your attention to enjoying life to its fullest.
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Building wealth is only half the job. Protecting wealth for your loved ones and yourself is equally important. Through estate planning, business planning, and asset protection, McNair Dallas Law will help you protect everything you love — family, friends and favorite charities. For more information, be sure to visit our website where you can explore details about our firm, or book a call today.
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