Make It Easy for Your Loved Ones with an Estate Plan

Make It Easy for Your Loved Ones with an Estate Plan

I regularly meet with clients who want to take preventative measures to make sure their families are not burdened if they become incapacitated or die. The most common question I hear is, “What do I need to do to make it easy for my loved ones?”

I do have a few recommendations.

1. Prepare Your Will

When you die without a valid will in Texas, the law determines how your property is divided. You can see my previous post on that topic as it relates to single persons here. The statutory formula that determines how your property is distributed does not take into account your wishes or your unique circumstances. This often leads to a different outcome that you would expect or want.

Also, the process of settling your estate without a will may be significantly more complicated and, as a result, significantly more expensive. Having a will is the only way to make sure your assets are distributed the way you want and to make sure your estate is settled in an efficient manner.

2. Name a Guardian for Your Minor Children

Because you know your children better than anyone else, you are in the unique position of choosing the best person to raise them in the event of a tragedy in your family. But, if you don’t name a guardian, that decision will be made by a judge who must follow certain legal guidelines and doesn’t know you or your children. Again, this can often lead to consequences you would not want.

Suppose, for example, that the law requires a court to award custody to an orphaned child’s grandparents. But, the extended family of the child’s parents do not get along and disagree about who would be best suited to care for the child. In that situation, a legal custody battle over guardianship may be the outcome. Your child would be caught in the middle of that battle and be subjected to more stress during what is already an emotionally tumultuous time.

3. Leave Assets for Your Children in a Trust

Minors in Texas are considered incapacitated. If you leave them more than a nominal amount of money outright, a guardianship will have to be created to manage those assets for them. Guardianships can be expensive and time-consuming. Additionally, the assets you leave them will be distributed to them when they turn 18 years old when they may not have the wisdom or foresight to manage them wisely.

A trust can make sure that your assets are managed by a person of your choosing and that your property is ultimately distributed how and when you decide.

4. Coordinate Your Non-Probate Assets with your Overall Estate Plan

Non-probate assets include things like life insurance. I have seen clients spend time and money creating an estate plan only to forget to change the beneficiary designation on assets like life insurance that will not go through the probate process. You don’t want to let that happen.

After you finalize and sign your will, you must change your beneficiary designations to match the way your will disposes of your assets. If you don’t do this, your property may not be distributed in the way you desire.

5. Make Your End of Life Wishes Known

Do you know now whether you would want life sustaining treatment if you suffer from an irreversible or terminal condition? If you know what you want in that situation, share it with your loved ones. When they know your wishes and your reasoning behind those wishes it relieves a lot of stress they may feel in making those decisions without your guidance.

6. Prepare a Durable Power of Attorney

Should you become disabled without having a durable power of attorney in place, it may be necessary for your family to seek a court-ordered guardianship of your person and estate so they can manage your affairs for you. Such a guardianship proceeding is time-consuming and expensive. You can avoid that possibility by creating a durable power of attorney before a tragedy occurs.

7. Make Sure You Have Enough Life Insurance

Life insurance is the best way to ease the financial burden on your family in the event of a tragedy. This is especially true if you are the sole provider for the family. Not having enough assets or insurance at the time of your death may mean that your spouse cannot afford to maintain the family home or pay for living expenses.

Life insurance is especially important if you and your spouse both die together. Ultimately, it is your responsibility to provide for the financial support of your children in the event the unthinkable happens. Life insurance can help the guardians you’ve selected support your children.

8. Plan for the Disposition of Intangible Treasures

I find that many clients take great care to plan for their higher value assets like homes, 401Ks, IRAs and jewelry. But, my experience is that the items causing the most conflict after the death of a loved one are items that hold sentimental value.

My recommendation, therefore, is that your family openly talk about the items that hold specific sentimental value for any individual. You can then include a special bequest to those individuals for such sentimental items.

9. Organize Your Records

Your family will not appreciate having to rummage through your disorganized records while they are grieving your loss. Do them a favor and get your records in order so they can easily find what they need when they need it.

10. Tell Loved Ones Where Important Documents are Located

It really doesn’t matter where you keep your estate planning documents if know one knows where to find them. Tell your beneficiaries and your executor where you are storing your estate documents. And, don’t just tell them once but remind them over the years at family gatherings.

Following these 10 steps will allow you to rest easy and know that you have protected your loved ones when tragedy strikes. And, your family will be grateful.


What is a Directive to Physicians?

What is a Directive to Physicians?

A Directive to Physicians is more popularly known as a “Living Will.” It is a document that instructs your physician not to use artificial methods to extend your life if you have a terminal or irreversible condition. Stating your wishes in advance of such a diagnosis reduces the possibility of family conflict and spares your loved ones these difficult end-of-life choices.

Requirements for a Directive to Physicians

You may execute a written Directive to Physicians as long as you are competent. You must sign the directive in front of at least two witnesses who are also competent adults.

At least one of the witnesses cannot be:

  • A person you have named to make health care treatment decisions for you. A person related to you by either blood or marriage.
  • A person who is a beneficiary of your estate.
  • A person who has a claim on your estate.
  • A person who is your attending physician.
  • A person who is employed by your attending physician.
  • A person who is an employee of a health care facility where you reside if that person is involved in providing for your direct care as a director, officer, partner, or business office employee of the health care facility or its parent organization.

Rather than signing your directive in the presence of witnesses, you can sign it in the presence of a notary public who then acknowledges your signature. If your directive to physicians is properly signed in the presence of witnesses, it is effective even if it is not notarized. Neither your doctor nor any health care facility may require that your directive be notarized.

Transferring Title to a Vehicle Without Probate

Transferring Title to a Vehicle Without Probate

I get a lot of questions about estate planning by email. Most of the questions are too involved for an answer by return email. In those situations, I arrange either an in-office consultation or a phone consultation. But, every now and again I do get a question that can be easily answered with a simple email. The most recent question is one such question. And, I get this question so often I thought I’d do a quick post to answer it for the benefit anyone else who may be wondering whether to send me a message about it.

Here’s the scenario:

A young man dies without a will. He is an adult but is not married and has no children. He is survived by both parents, two full siblings and a half sibling. He lived with a parent, and the only possession in his name is a car.

The question is whether probate is necessary to transfer title to the car the young man owned at the die of his death.

The simple answer is that you can transfer title to the car with an Affidavit of Heirship for a Motor Vehicle. While you can have an attorney draft the affidavit for you, there is a form for it on the Texas Department of Motor Vehicles website (download form VTR-262). The heirs will have to sign the affidavit in the presence of a notary public stating that they are the young man’s only known heirs.

For more information on who inherits the car in this situation, you can read I’m Single, I Have No Children … Do I Need a Will in Texas? In this particular case, the young man’s parents inherit his entire estate equally because he was unmarried, had no children, and his parents survived him.


The Difficulty of Life or Death Decisions

The Difficulty of Life or Death Decisions

During my initial consultation with clients, I always discuss the various documents that should be part of a comprehensive estate plan. As I explain the purpose of each document I find that the Directive to Physicians, also known as a Living Will, generates the most discussion. It’s also the document clients have the most difficulty signing.

The reason this document creates such a “flurry” of discussion is that it forces you to consider that one day you may be hospitalized in an unconscious state with no hope of recovery. And, it puts you in the position of deciding before that happens how and when to end your life. Thinking about issues like this can and should make you think deeply and ask a lot of questions.

What Are Your End Of Life Wishes?

Most people will agree that they don’t want artificial means to be use to keep them alive if they are significantly brain damaged and won’t be able to live a meaningful life. But, in reality, the circumstances are not always clearly black and white. Let me use two examples that illustrate the complexities of the issues.

The Case of Shellie Eldredge

The first case scenario involves Shellie Eldredge, a young mother who slipped into a coma after a moped accident in Hawaii broke nearly 50 of her bones, fractured her skull, snapped her spine and left her in a coma. Her doctors didn’t expect her to recover and even recommended stopping life support. Her husband, however, chose not to follow the recommendation. That turned out to be a great decision. After about a month in the hospital, Shelli recovered enough to go home.

The Case of Edwarda O’Bara

Shelli Eldredge was fortunate. Many people with severe brain injuries and in a coma never recover. Edwarda O’Bara is an example. She slipped into a diabetic-related coma when she was only 16 years old. Her parents cared for her in their home, feeding her through a tube until they died. After their deaths, her sister took over caring for her. She lived for 42 years in a coma and then died.

Using a Directive to Physicians to Communicate Your Wishes

The Directive to Physician allows you to state your preferences with regards to life-sustaining treatment. In it, you state whether you want your doctors to give, withhold or withdraw life-sustaining treatment if you are diagnosed with a terminal or irreversible condition and are unable to make your own health care decisions.

You get to decide, in advance, whether you want doctors to withhold all treatment other than that required to keep you comfortable, or alternatively, whether you want to be kept alive in your condition using available life-sustaining treatment.

Terminal and Irreversible Conditions

The Directive to Physicians allows you to state your preferences in two situations. The first situation addresses what you want to happen if are diagnosed with a terminal condition. The second situation addresses what you want to happen if you are diagnosed with an irreversible condition.

A terminal condition is defined as an incurable condition that will produce death within six months even if life sustaining treatment is given.

An irreversible condition is defined as a medical condition that:

  1. May be treated but is never cured or eliminated;
  2. Leaves a person unable to care for or make decisions for himself; and
  3. Is fatal without life-sustaining treatment.

The section dealing with irreversible conditions is the one that gives many people pause. Section 166.033 of the Tex. Health and Safety Code, the statute authorizing the form for a written directive, explains it in this way:

“Many serious illnesses such as cancer, failure of major organs (kidney, heart, liver, or lung), and serious brain disease such as Alzheimer’s dementia may be considered irreversible early on. There is no cure, but the patient may be kept alive for prolonged periods of time if the patient receives life-sustaining treatments. Late in the course of the same illness, the disease may be considered terminal when, even with treatment, the patient is expected to die. You may wish to consider which burdens of treatment you would be willing to accept in an effort to achieve a particular outcome. This is a very personal decision that you may wish to discuss with your physician, family, or other important persons in your life.”

The important thing to remember about the Directive is that it only becomes effective if you become incapacitated and are unable to make these decisions for yourself. And, you can revoke the Directive at any time, even if you are incapacitated, as long as you are able to communicate your wishes in some way.

Why Sign a Directive?

Signing a Directive is a difficult decision but it puts you in control of your end of life treatment by allowing you to specify in advance what life-sustaining treatment you will receive.

Consider the Edwarda Obara’s story previously mentioned. I wouldn’t want to live like that, would you? But, I wouldn’t want my family to end my treatment too soon either. I want my family to give me every possible chance to recover like Shelli Eldredge’s family did for her. But, if my condition is such that I will never be able to live a meaningful life, I know in advance that I don’t want to be kept alive artificially in a state of unconsciousness for decades. This is especially true in light of recent studies suggesting that some people living in vegetative states are actually conscious. Can you imagine being conscious but trapped in a body that can’t move or communicate for a lifetime?

Signing a Directive to Physicians relieves your family of the burden of making that choice on their own. Should your family disagree about how to proceed, having a directive from you can prevent family conflict.

Making your Decision

Deciding the time and circumstances for withdrawing or withholding life-sustaining treatment is a deeply personal one. It deserves serious thought and consideration. I recommend that my clients talk to people they trust before making such a decision. I specifically recommend they seek counsel from family members, physicians and clergy.

But, remember that the Directive is not written in stone. If you do change your mind about any aspect of it, you can revoke it completely or revoke it and sign a new one that is more in line with your new wishes.


What is a Durable Power of Attorney?

What is a Durable Power of Attorney?

A Durable Power of Attorney allows you to appoint another person to make financial and other non-medical decisions for you if you become incapable of making those decisions for yourself.  It is called “durable” because it does not terminate if you become incapacitated or disabled like a “regular” Power of Attorney does. A Durable Power of Attorney can take effect at the time you sign it, or it can “spring” into effect when you become disabled or incapacitated.

Authority You Can Give with a Durable Power of Attorney

The person you appoint to act for you is called your agent or “attorney-in-fact.” You choose exactly how much authority to give your agent. It can be a lot of authority or only a little authority, depending on your needs and desires.  For example, you can give your agent the authority to act for you in any or all of the following ways:

  • Pay for your support and care
  • Borrow money in your name
  • Conduct bank transactions on your behalf Handle your real property
  • Handle legal claims on your behalf
  • Access your safety deposit box
  • Deal with your insurance and retirement benefits Prepare and file your tax returns
  • Exercise your stockholder rights
  • Contract for services
  • Make gifts to others
  • Collect your Social Security benefits
  • Perform unspecified, non-medical tasks

Legal Requirements for a Durable Power of Attorney

To be effective in Texas, the Durable Power of Attorney must:

  • Be in writing
  • Be signed by an adult
  • Name an agent or attorney-in-fact
  • Must specifically state that the agent’s authority either continues after you become disabled, or that it begins when you become disabled
  • Be acknowledged by a Notary Public

Your agent has broad authority to act for you. It is, therefore, important that you select someone you completely trust to act in your best interest when you execute a Durable Power of Attorney.