Heading off to soak up the sun or swoosh down the mountains this Spring Break? You have undoubtedly spent a great deal of time planning your trip, but have you spent any time planning your estate? Before you leave on a big trip, it’s important to get your estate plan in order. Unfortunately, we never know when tragedy might strike.
Everyone needs a will, no matter how old you are. Some of the most complex probate cases involve a younger person passing away. When we are young, we often have a lot of irons in the fire. Generally, we are less likely to have consolidated our assets, more likely to have higher liabilities (such as a mortgage, student loan debt, or line of credit) and more likely to die leaving minor children. These are all crucial aspects of your life that a will can help plan for.
Without a will, we give up our ability to control who gets the assets we leave behind. A will is not just about handling what you may own, but also about handling what you may owe or be owed if you pass away. A good will outlines your beneficiaries and the representative of your estate, commonly called your executor. Your executor handles the distribution of your assets as well as the payment of your debts. Additionally, if you pass away and you are owed money, a representative usually must be appointed to recover those funds. Without a will, the court will assign a representative to your estate. Without a will this process takes longer, is more expensive, and you do not have the ability to choose who gets what you have or who is in charge of your estate.
You also need a plan in the event you become incapacitated. That’s where powers of attorney come in. Texas has two powers of attorney: a medical power of attorney and a statutory durable power of attorney. A medical power of attorney allows the person of your choice to make medical decisions on your behalf, if you are unable to do so. A statutory durable power of attorney allows the person of your choice to handle financial, legal, and business matters on your behalf. For example, the power of attorney may allow them to help you with banking, the sale of a house, or speaking with the IRS. You can choose when you would like this power of attorney to become effective and how much power your agent will have.
Don’t head out for your vacation without making sure your estate plan is in order!