Wills, Probate & Estate Planning

Wills and Other Estate Planning Tools

by Richard T. Marshall

Sooner or later most of us, at least the more thoughtful ones, get around to thinking about a last will and testament. Why do we finally conclude we need a will? Because we realize we won’t always be here to make life’s important decisions, and we want to appoint someone to make those decisions when we no longer have that power. What most of us don’t realize is that merely writing a will is like buying a hammer and no other tool to embark on a remodeling project. This is because a will merely sets out a set of directions about who will represent us and do our bidding after we’re gone.

The big picture, however, requires more tools. What about when we are still here physically, but no longer competent? More and more of us are surviving beyond the biblical threescore and ten years, only to find ourselves victims of Alzheimer’s, strokes, or other health problems that rob us of our competency. That’s why we need more than a will. Fortunately, our Texas Probate Code provides additional tools for such events. A statutory durable power of attorney will ensure our ability to make business, property, financial, and other decisions and transactions through a designated agent, such as a spouse, or other trusted relative or associate, even after we’ve lost the ability to make such decisions and enter into such transactions ourselves. A simple form for such a power of attorney is set out in the Texas Probate Code.

What about health care decisions? The Health and Safety Code sets out a simple form for a medical power of attorney, which is a tool for empowering a loved one or other agent to make health care decisions when we are unable to do so. We are talking about decisions such as withdrawing life support or heroic life-saving measures, when a failure to implement such decisions will only result in outrageous medical and hospital expenses incurred in keeping a brain-dead individual alive. A companion document, the directive to physicians, is also set out in the Texas Health and Safety Code. This instrument will authorize the treating physician to terminate life support at the appropriate time.

The foregoing instruments, the will, the statutory durable power of attorney, the medical power of attorney, and directive to physicians, constitute the minimum basic package to be considered in assuring that things will be taken care of when we no longer can do them by ourselves.

There are, however, other documents, as well, that most of us will probably want to consider. Certainly most of us would want to empower a spouse or other agent to carry out our funeral and burial wishes. The Texas Health and Safety Code sets out a statutory form for Appointment of Agent to Control Disposition of Remains.
Most states, including Texas, now recognize the DNR or Do Not Resuscitate form. This is a simple document, usually obtained in doctors’ offices, instructing EMS personnel and others not to attempt to resuscitate a patient at an accident scene or in an emergency room under certain circumstances.

We all are most acutely concerned with the welfare of our minor children when planning a will. We should name the person or persons we want to be guardians. Senior citizens also have to think about naming their own guardians in anticipation of the need for such an appointment. So often an elderly person living alone is declared incompetent on the basis of an application filed in Probate Court by a disinterested agency seeking to be named the guardian. In many instances such agencies are charitable in nature, but there are also a number of people out there in the guardianship business doing it for the money. Wouldn’t we want to consider preparing a declaration of guardian document, in addition to a durable power of attorney, just to make sure that if a guardian has to be appointed at some time in the future, it will be someone intimately concerned with the person and his or her welfare?

When seeking an attorney’s review of an estate plan, a client should determine if a revocable trust should be part of the plan. In most cases, such a tool is unnecessary; but there are circumstances that require serious consideration of such a trust. In Texas we don’t consider living trusts as a means to avoid probate, because we have an excellent probate code, which has served as a model for other states, and involves none of the exasperating probate court expenses and delays which may be encountered in some states. Trusts in Texas are primarily recommended for larger estates as tax reduction strategies, and also for certain life insurance policies and charitable donation purposes, as well as for real estate owned in states with difficult probate laws.

There are other things you should consider, outside of the legal documents, when planning. An organization named Aging with Dignity has put together a plan for implementing a Five Wishes program, and they have put out documents which are recognized in 33 states and the District of Columbia. Unfortunately, Texas is not one of those states. Briefly, the Five Wishes cover: (1) The person whom I want to make decisions about my care, (2) The kind of medical treatment I want or don’t want, (3) How comfortable I want to be, (4) How I want people to treat me, and (5) What I want my loved ones to know. The last item, number 5, is especially appreciated by one’s survivors.

Recently an attorney colleague of ours died. In addition to his estate plan documents, he left a 20-page memorandum to his family, listing what he wanted them to know. This is something we can prepare ourselves, without the assistance of an attorney. It can provide a good deal of comfort and peace of mind for our loved ones after we are gone. Such a memorandum or good-bye letter can serve as a sorely needed road map for your personal representative, including such simple items as where to find the keys to your safe deposit box, your post office box, your vehicles, your home and office; and such complex items as a list of your life insurance policies including outstanding policy loans, or a list of real estate holdings including unpaid mortgage balances. In short, you need to prepare an inventory. If you die, your executor will have to present an inventory to the probate court within a short period of time. You will want to list your personal jewelry and collectibles, especially. These are items that are specifically bequeathed in many cases, and often not to be found at death, simply because they have been given away or sold during the testator’s lifetime. If you no longer have a certain bracelet or ring, make sure you take it off the inventory, and write down the date it was sold or given away, and to whom. This simple precaution might be all that is needed to prevent a family uproar. While you are at it, get out the camera or camcorder and scan the interior of your home, and keep a copy of the pictures or video at another location, in case you have a fire or burglary loss.

Make lists of your assets, your debts, your business interests, your credit cards, your veterans benefits, and your pensions or retirement plans. Regarding your family history, list the names and whereabouts of your parents, brothers, sisters, children and grandchildren. List your prior marriages, if any. Make a record of your family medical history, in order to assist health care providers in diagnosis. List your service providers, including your physicians, your children’s physicians, and even the pet’s veterinarian and the yard man! Make a list of all the people you want contacted in the event of your death. Make a checklist outlining your desires concerning your funeral services and disposition of your remains.

Keep in mind that estate planning is an ongoing activity, and not just a one time solution. Life goes on, and events that affect our estates happen every day. Children divorce, grandchildren are born, valuable jewelry is purchased, and, most importantly, our net worth may keep on increasing. Just the purchase of a life insurance policy may suddenly boost the taxable value of an estate at death by hundreds of thousands of dollars, because the I.R.S. includes the death benefit as part of the estate if the policy is owned in the decedent’s name. Real estate, stock market and mutual fund investments over the years have boosted the value of many personal estates to the point where an estate plan and will drafted a decade or more ago may be inadequate today. A simple will, which was adequate for a $500,000 estate five years ago, may have to be updated to include a bypass trust, to avoid unnecessary estate taxation, which kicks in where the estate is valued at $2,000,000 or more. A life insurance trust may have to be set up to take the ownership of the policy out of the insured’s name.

The foregoing is a general outline of considerations to be heeded before making an appointment with an attorney for drafting estate planning documents. It is not to be taken, under any circumstances, as professional advice from the author of this brief outline. Legal advice, just like medical advice, is something a professional can only furnish on a one-to-one basis, after carefully assessing the particular needs and goals of the individual client.

The above is not legal advice. That can only come from a qualified attorney who is familiar with all the facts and circumstances of a particular, specific case and the relevant law.