Planning for the future :
Estate Planning Terminology
Ever get confused by estate planning terminology ? If so , you ’ re not alone . Here are some definitions of common estate planning documents .
Wills A will is a legal document which controls how property passes ( who receives it ) upon death and who is in charge of handling the process ( the executor in charge of probating the will ). If you do not have a will at the time of your death , the laws of Texas will determine who receives your property ; it will not escheat to the State . Wills may be amended or revoked as circumstances change , so there is no reason to delay your estate planning .
Living Trusts Living trusts are created during a person ’ s lifetime , and assets can either be transferred into the living trust prior to death , or these trusts can be funded with your assets after death through probate . There are many valid reasons for creating a living trust as a part of your estate plan . However , in Texas , because the probate process can be fairly simple for most people if your will is drafted properly , a living trust may not be necessary .
Powers of Attorney A power of attorney is a written instrument in which one person , the “ principal ,” appoints another person , the “ attorney in fact ,” as his or her agent , granting the agent authority to perform certain acts . There are generally two types of powers of attorney : financial and medical .
A financial power of attorney may be general and give the agent broad authority to act on behalf of the principal , or it may be limited to certain specific acts or circumstances . A general power of attorney is used as an advanced directive to allow an individual to designate an agent to manage financial matters on his or her behalf if the principal becomes incapacitated or otherwise unable to handle financial affairs . This is called a durable power of attorney , or sometimes , a statutory durable power of attorney .
With a medical power of attorney , the agent may make any health care decision for the principal that the principal could have made if he or she did not lack the ability to do so . However , an attending physician must certify in writing that the principal is no longer able to make health care decisions before a medical power of attorney will become effective .
All powers of attorney “ expire ” and are no longer valid when the principal passes away . While living and of sound mind , a principal may revoke ( or cancel ) his or her powers of attorney .
Living Wills and DNRs The Directive to Physicians and Family or Surrogates is
a document signed by a principal directing his physician to withhold life-sustaining procedures if the principal is suffering from either a terminal or irreversible condition . The Directive to Physicians and Family or Surrogates form , also known as the “ Living Will ,” is only valid in a hospital setting .
The Living Will is often confused with a DNR or “ Out-of- Hospital Do Not Resuscitate ” form . The Out of Hospital DNR form may be used by individuals who are certified by their physician to be terminal in order to show that they should not be resuscitated in an out of hospital setting . This form is prepared by a physician and allows health care providers , such as EMS medics , to refrain from resuscitating the terminal individual in a setting other than a hospital .
Guardian Designations A person who is not incapacitated may designate in writing those persons to serve as guardian of his or her person ( to make medical decisions ) or estate ( to make financial decisions ), should he or she become incapacitated in the future . Further , the designation may identify certain individuals who are not to serve as guardian of the person and / or estate .
Likewise , parents or guardians of minor children are able to name eligible persons to serve as guardian for their minor children . Remember , parents are always the “ natural ” guardian of their children . This means that if a child ’ s parents are divorced , one parent cannot make a guardian designation for the child that excludes the child ’ s other legal parent .
These definitions are general in nature but may assist you in discussing your personal situation with experienced estate planning counsel . Being informed will help you “ plan for the
future .”
This article is for informational purposes only and not for the purpose of providing legal advice . You should contact an attorney to obtain advice with respect to any particular issue .
Catherine H . Goodman is an attorney with Harris , Finley & Bogle , P . C . She is Board Certified in Estate Planning and Probate Law by the Texas Board of Legal Specialization and is a Fellow of the American College of Trust Law and Estate Counsel ( ACTEC ). She concentrates her 23 year legal practice in estate planning , probate and guardianship matters , and related litigation .
JULY 2017 PARKER COUNTY TODAY
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