Estate planning is not just about end-of-life planning; it also offers legal protection in times of disability or incapacity. The documents detailing who should be appointed to handled your medical and financial decisions in that event are just as important as your will.
In order to make key decisions about yourself, you must be of sound mind and able to process what is happening. Some people in the throes of a serious illness or cognitive decline lose these abilities. That’s why it’s so important to lay the foundation now in order to prepare for the future. Below are the primary legal documents you should include as part of your comprehensive estate planning.
Statutory Durable Powers of Attorney
As you get older, a number of factors can impact a person’s mental clarity and ability to make sound financial decisions, including mental deterioration through Alzheimer’s or dementia or even just as a natural part of the aging process. There may come a point of time in your life when you can no longer handle your own financial affairs such as paying your bills, collecting money owed to you, or monitoring your investments.
Seniors in particular are vulnerable to financial abuse from people who have undue influence or access to their sensitive financial data. As seniors age, they may become less financially literate, and they may make decisions that jeopardize plans to leave assets to loved ones.
Therefore, it is in your best interest to prepare for when you begin to lose capacity to make these decisions. A statutory durable power of attorney – also commonly referred to as a financial power of attorney – allows you to name someone who can make financial decisions on your behalf when you are no longer able. This power can be customized based on your own financial situation, but generally allows your “attorney in fact” to make decisions related to the care of your finances, property, and investments.
It’s also important to note that married people often assume their spouse will be authorized to take care of their financial and business affairs in these situations, but this legal right only applies to certain jointly-owned property. Real estate and your separate property require your spouse or other agent be named in a Power of Attorney.
Medical Power of Attorney
The other major area where you may need help with decision making is in your medical care. Doctors need informed consent for certain forms of treatment, which is not something you can give when your capacity has declined. If someone else is making that decision, it should be someone you trust and who has the ability to speak with doctors and advocate for you.
A medical power of attorney is similar to a financial power of attorney, but applies strictly to healthcare decisions. This legal document authorizes another person to make healthcare and medical treatment decisions on your behalf if you are unable to make or communicate them on your own.
A medical power of attorney should be given to someone who knows what type of decisions you would want to be made. Make sure the person you appoint is someone who truly understands your wishes as it relates to your medical care, and is willing to honor those wishes in the event of your incapacitation. Preferably, the person should be as local as possible, so they can see you personally and interact with doctors face-to-face.
Advance Directives (or Living Wills)
Additionally, you can continue to have input in your medical decisions, even when you can no longer effectively communicate. The key is to put your wishes down on paper, so your family (or your attorney in fact) knows exactly what you would want in certain situations. This is accomplished with an advance directive (sometimes referred to as a “living will”).
An advance directive includes your preferences regarding artificial life support, the length of time you would like to be kept alive by life support, organ donation, or any other medical treatment options you want to specifically designate. For instance, if you wish to abstain from certain treatments because of religious beliefs or personal preferences, you can include this in your living will. An advance directive allows you to make these choices ahead of time rather than placing the burden of these serious decisions on your loved ones.
HIPAA Release Authorization
Alongside the power to make decisions, the person making your medical decisions would also need a HIPAA release authorization. This document allows your physician to speak freely about your medical condition and treatment, but only with the persons you have designated in this document. Otherwise, doctors would not be able to share medical information with them, and they would be unable to make effective medical decisions without knowing the complete picture. This authorization is especially important if you designate an unrelated person or unmarried partner in your medical power of attorney.
Appointment for Disposition of Remains
If you have specific wishes for what should happen to your remains after your death, you should also complete an appointment for disposition of remains. This document designates a person of your choosing to make sure your funeral, memorial, or other arrangements are taken care of according to your detailed wishes. If you have children from a prior marriage or an unmarried partner, this document can help ease any tensions after you pass away by appointing a single person to be responsible.
Transfer on Death Deeds
In addition to making arrangements for your medical and financial affairs, you can also implement various strategies to circumvent the probate process for certain types of assets.
One of the primary means of accomplishing this for real estate is through a transfer on death deed, which transfers property to your designated beneficiaries upon your death. It works much like a payable-on-death designation on a bank account, expect for real property. Executing a transfer on death deed allows you to maintain complete control and ownership of the property or properties throughout your lifetime – meaning you can still sell them or use them as collateral on a loan. After your death, the property passes directly to your named beneficiaries without the need for a formal court probate process. This is a valuable option for anyone who owns a house, ranch, farm, or interests in uncut timber or mineral rights and wants to ensure the property is passed down.
Act on an Estate Plan Now When You Can
Estate planning is a mix of asset transfer planning, making your wishes known, and providing for others to act on your behalf. You should have a comprehensive plan in place that considers a number of contingencies. At certain points, you should reevaluate your estate plan and make changes as necessary. Your circumstances in life may change, and your estate plan should change to match them.
It is essential to put these various aspects of ancillary estate planning down on paper now, while you still have the capacity to do so. Once your capacity begins to decline, you will most likely be unable to execute any legally binding document. You never know when you may reach this point because it could happen suddenly. Therefore, it is crucial to act now. Whatever you do now will make life easier for your family in the future.
There are a variety of options available to you, and you need to know all of them in order to make an informed decision in consultation with your family. An experienced estate planning lawyer will review your situation and make suggestions for what will work best for your specific needs, and help you prepare and execute the documents so they are in effect when you need them.
Call a Texas Estate Planning Attorney Today
If you do not already have an estate plan, your phone call to an estate planning lawyer cannot wait. Towson Law works with families like yours to help you prepare for the future in the present. Call us today at (817) 856-0270 or message us online to begin this vital process today. This may be one of the most important phone calls you ever make for your family.