New Year's Resolution: Get My Affairs in Order.
But what does “get my affairs in order” mean? As I tell my clients, it means getting your legal and financial matters sorted out ahead of time so that your loved ones are left with one less thing to cope with upon your passing.
Getting your affairs in order should address both things: legal and financial.
On the legal side, I recommend my clients have, at a minimum, the following documents:
Last Will and Testament:
This is probably the most common and most important estate planning document. Having a will prepared by your attorney ensures that your property goes where you want it to go and gets there relatively quickly. A will is especially important for blended families. Without a will, property will pass according to the Texas Estates Code. For a married couple with children from other relationships, this could result in the children owning half of the couple’s home rather than passing all of the interest in the home to the surviving spouse. Having a valid, self-proved will also streamlines the probate process, which, in Comal County, can take less than 60 days beginning to end. Probating an estate without a will could take several months depending on various factors. Probating a self-proved will is also about half the cost of probating an estate without a will.
Statutory Power of Attorney:
The statutory power of attorney gives someone, typically a spouse or adult child, the ability to access your financial resources, pay your bills, and take other action on your behalf if you are unable to do so.
Medical Power of Attorney:
This document grants someone the ability to make medical decisions on your behalf if you are unable to do so, such as consent to antibiotics, setting broken bones, etc.
Directive to Physicians:
The Directive tells your doctor what you want your end of life care to look like. If you are diagnosed with a terminal or incurable condition, do you want to be allowed to pass comfortably or do you want to be kept alive using all available means? This document is not for you, it’s for your loved ones. Even if your family knows what your wishes are, it’s still going to be hard on them to make that decision and say it out loud.
HIPAA Release:
I have included this document in my estate planning recommendation based on my experiences with parents and other family members with health issues. The last thing you want in an emergency is a delay while someone at the hospital figures out whether or not they can tell your kids how you’re doing.
Depending on your situation, a trust may also be a good idea for streamlining the probate process, dealing with property in other states, or distributing financial assets such as 401ks and life insurance proceeds in a specific way.
On the financial side of things, make sure that your financial institutions have up-to-date beneficiary designations. Most financial assets such as bank accounts, retirement accounts, and life insurance proceeds are going to pass outside of the estate and are not subject to the provisions of the will. Instead, these assets are going to pass according to the agreement that you have with the financial institution, specifically the designation of the payable on death beneficiary.
You should avoid having these types of assets pass to your estate because it will require getting the estate admitted to probate before the assets can be paid to your beneficiaries. Additionally, if the assets pass to the estate, they are subject to the debts that you leave behind. As part of “getting your affairs in order,” you should make sure that all of your beneficiary designations with the various institutions are up to date.
Once you have executed estate planning documents and the beneficiary designations are in order, put all of them in a safe place (a fireproof safe if you have one) and let your loved ones know where they are. This will alleviate at least one stress point in the process. I do not recommend placing these documents in a safe deposit box at a bank. If you do, you may not be able to get them when you need them. Further, if your executor is not named on the account, you may need a court order to get access – which can nearly double the cost of the probate.
If you have any questions about estate planning or probate, please feel free to contact us at (830) 885-2406 or contact@rammelpc.com. You can also find us at www.rammelpc.com, Facebook and Google.
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Jason M. Rammel, P.C.
- January 23, 2023
- (830) 885-2406
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