Estate Planning by CrisLapuz


									Basic Estate Planning

One of the most common misunderstandings about estate planning is the belief
that estate planning is only for the wealthy. Most people have an estate, even
though the estate is not large enough to be subject to Federal Estate Taxes,
and everyone needs to do basic estate planning.

Estate planning includes more than just a will. It includes planning for
disability during your lifetime, disposition of your assets and liabilities at the
time of death, and designation of a guardian for minor children.

Many people (as much as half of the population) will experience a period of
either physical or mental disability before their death. Lack of planning makes
caring for a disabled individual very expensive and cumbersome for the care
giver. Good planning preserves a person's dignity, as well as their assets to be
used for their care.

The basic estate planning documents include a Will that is valid in the state of
Texas, a Statutory Durable Power of Attorney, a Medical Power of
Attorney, a Directive to Physicians (often called a Living Will) and a
Designation of Guardian Before Need Arises. Estate planning is governed
primarily by state law, while estate taxes are governed by federal and state
laws. This means that estate planning must include a review of a person's
estate to determine if the estate will be taxable, and to plan techniques for
reducing estate taxes where applicable. Even if an estate is not subject to
Federal Estate Tax (and most are not), good estate planning enables a person
to use the powers granted by the state of Texas to make health care choices
and to dispose of his or her estate at death.

We can assist you with the preparation of your estate and help you make
decisions for the future providing peace of mind for you and your family.

       Will - the state of Texas allows an individual to designate how his or her
assets and liabilities will be distributed at the time of death. In order to protect
that right, the state requires that a will be properly executed to be considered
valid. A valid Texas will can name an Independent Executor to serve without
bond and with minimal court supervision. Probate is the legal process of
proving the will in court, settling the estate, and distributing the assets. In
Texas the cost of probating a will is very reasonable. Probate can be very
expensive if an individual has assets and dies without a valid will. Executing a
valid Texas will can go a long way to preserving assets for beneficiaries.

       Statutory Durable Power of Attorney - This document allows an
individual to designate someone to manage his or her financial affairs in case
of disability. The powers granted in the document can become effective
immediately or can become effective upon disability. In either case, the powers
will still be effective even after the person becomes disabled. That is why it is
called a durable power of attorney. This document can be very powerful. The
state of Texas has provided a statutory format to be used to help improve
acceptance of the document by third parties. Without a Statutory Durable
Power of Attorney, a Guardianship would likely be required to take over a
disabled person's financial affairs. Guardianships require continuing oversight
by the Court, are very expensive, and expose a person's private business to the
public record.

       Medical Power of Attorney - This is a companion document to the
Statutory Durable Power of Attorney. The difference is that the Medical Power
of Attorney designates the persons who will make health care decisions during
one's disability. This document is particularly valuable where someone other
than a spouse will be making those decisions.

        Directive to Physicians - This document is sometimes called a Living
Will. It allows an individual to decide in advance if he or she wishes to have
artificial measures used to sustain life when the person is near death. Many
people do not wish to be kept alive by means of artificial respirators or feeding
tubes if they are not able to sustain life on their own. Without a Directive to
Physicians, the doctors involved may be required to use all measures available
to sustain life. Proper execution of this document can help maintain a person's
dignity and preserve assets for beneficiaries.

      Designation of Guardian Before Need Arises - This is a relatively new
statutory document in the state of Texas. It allows people to designate in
advance who their guardian should be if they ever need one. It also allows
people to disqualify certain individuals from ever becoming guardian. This
document can bring peace of mind and assist the court in making a proper
guardianship designation if the need ever arises.

      These documents form the basic estate planning package. In addition, if
the estate is taxable or if there are minor children who require guardianship
planning or trust planning, the estate plan will take these matters into
consideration. Good planning significantly eases the burden shouldered by our
loved ones when we become disabled or die.

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