The Five Basic Estate Planning Documents You Need
When it comes to estate planning, getting your will sorted out is often the first thing that comes to mind, and it’s usually the priority. Having a will is an extremely important part of your estate plan, but there are other documents that are equally important. A will can only take effect once you are dead, so there are other papers that, if you were temporarily or permanently paralyzed, would manage all of your assets and carry out any of your wishes.
What is Estate Planning?
A lot of people have a vague idea of what estate planning is, but they aren’t sure on the full details of it. Estate planning can enable you to have power and say over your property once you have passed on or if you become disabled. It allows you to make personal decisions about your health care, personal care, how your assets will be distributed and managed, and it also provides you with peace of mind knowing that your legal and financial affairs are sorted.
It’s extremely important to have a proper estate plan in place. If you do not make your wishes known, due to Texas laws, the state can make vital decisions on your behalf. Whether you live in San Antonio, Dallas or another city in Texas, there are five basic estate-planning documents that every adult in Texas should have.
Last Will and Testament
When you die, if you have written a will, it allows you to have control over how your property is distributed among family and friends. You can name a person that you trust as your overseer, and they will ensure that your assets are being managed and distributed correctly. If you have children who are still minors, you can also use your will to appoint a trusted guardian that will care for them.
You are not required to hire an estate planning attorney when writing your will, but having one can be very helpful. They will thoroughly review your will and ensure that the document is correct and legally defensible.
If you do not have a will, your property will be sorted by the Texas state, and your wishes may not be carried out, as you did not announce them. If you do not name a guardian for your children (minors), a judge will be left to make the decision for you.
Directive to Physicians
In the event that you are diagnosed with an irreversible condition or terminal illness, a directive to physicians is an important document that enables you to instruct your wishes to your doctor. Having a directive to physicians in place ensures that your family is protected if you become incapacitated or pass away.
Power of Attorney
If you are incapable of handling your business and personal affairs, you can grant power of attorney to a trusted individual, such as a family member or friend, to do it for you. The power of attorney document can either allow your appointee expansive authority on things like purchasing assets and disposing of them or it can allow limited authority where your appointee can manage your everyday financial matters such as bills and banking. You and your chosen representative should always thoroughly discuss your decision.
If you do become debilitated and you are unable to handle your own personal and business affairs, but you have not appointed power of attorney to anyone, a court order for guardianship may be put into place. Guardianship can be expensive and time-consuming so creating a power of attorney is important.
Medical Power of Attorney
If you are unable to make your own healthcare decisions, you can grant a trusted family member or friend with medical power of attorney. This will allow the appointed to make healthcare decisions for you. Unexpected accidents can happen, so it’s essential that you have one in place.
Health Insurance Portability and Accountability Act
HIPAA is a Federal law; it sets limits and rules on who can receive your health information and on who can access and look at your medical records. Covered entities can sometimes be reluctant to share medical information with anyone but the patient, as if they violate HIPAA rules, they face severe penalties.
If you have someone that you trust or someone that you want to be able to access your medical records, you have the ability to name an individual, so they have permission to do so. This means that your insurance companies, healthcare provider, and other companies have no demur about sharing your medical records with your authorized individual.