Wills are an important part of an estate plan, but they only take effect after you die. To protect yourself and your family during your lifetime, you also need documents that authorize trusted people to act on your behalf if you become ill or incapacitated. The following is a list of the basic five estate planning documents every adult in Texas needs:
Texas Last Will and Testament
A Will outlines who will inherit your property, who will take care of your children, and who will settle your estate after you die. Without a will, Texas law has a default plan for who inherits, called the intestacy statutes. That plan may not match what you would choose.
For example, I worked with a client a few years ago who assumed her longtime partner would inherit her interest in their house because they paid for it together. Without a will, he would not have. As a single person, her share would have passed to her parents. Having a will allowed her to protect her partner.
If you have minor children, a will lets you choose who will care for them and the property you leave them after you’re gone. If you don’t choose a guardian for your minor children, a judge who doesn’t know you or what’s important to you will make that decision. Additionally, your children may get their inheritance before they have the financial maturity to handle it properly.
Texas Durable Power of Attorney
A durable power of attorney lets you choose someone you trust to handle your financial matters if you need them to.
The person you name as your agent will be able to do things like pay your bills, manage your bank accounts, and take care of property needs. “Durable” means the document keeps working even if you become unable to make decisions.
Many people mistakenly assume a family member will be able to manage their property, but without a durable power of attorney, they will not have the legal authority to do so. Instead, a court would need to appoint a guardian of your estate, which can be time-consuming and expensive.
Texas Medical Power of Attorney
A medical power of attorney lets you name someone to make medical decisions for you if you are too sick or injured to communicate. It authorizes a person you trust to make medical decisions for you when you cannot speak for yourself. That’s why it’s important to pick someone who knows your values and will follow your wishes, even when it is hard.
Medical powers of attorney are not just for the elderly. Unexpected injuries or illness can occur at any age, so all adults should have one in place.
HIPAA Authorization
HIPAA, the Health Insurance Portability and Accountability Act, is a Federal law that sets rules and limits on who can look at your medical records or receive your health information.
That is a good thing. But those rules can also make it hard for loved ones to get updates. A HIPAA Authorization allows your doctors and hospitals to share information with the people you list. It does not give them the power to make decisions. It simply keeps them informed.
Texas Directive to Physicians
A Directive to Physicians, sometimes called a living will, states your preferences about what type of life-sustaining treatment you want to receive if you’re diagnosed with a terminal or irreversible condition. It helps your loved ones and doctors understand what you want if you can’t express it yourself.
Making a decision about whether to withhold life support is very difficult, especially when you don’t know what decision your loved one would have made. Many families later tell me it brought real comfort to know exactly what their loved one wanted.
All these documents work together to protect you and the people you love and can alleviate a lot of stress and uncertainty during difficult times.
