Wills Are Important for Everyone

Monday, May 7, 2007
Contributed by: Sharon E. White

Not long ago, my secretary made several appointments for me back-to-back one morning. That afternoon as I was thinking about those appointments, it struck me that all of the clients I had seen that morning to talk about estate planning issues were elderly. Of course, my teenagers think anyone over 30 is elderly. But I mean late seventies and eighties.

I continue to be amazed that, according to statistics, the majority of people die without a will. Elderly people are not the only ones who need to think about estate planning. Here are a couple of examples that we had in our office all in one month.

A couple in their 50s were killed in an auto accident. Neither of them had a will so their children were required to take out an administration to handle the estates.

A young single mother has a brain tumor. She does not have any estate planning documents. Who will make medical decisions for her? Who will take care of her 3 and 5 year olds if something happens to her?

Estate planning is something you want to be able to think about, not something done in crisis mode.

Every time I speak, I urge people to get basic estate planning documents in place. No one wants to think about these things happening to them, but they do happen. It is so much easier on both you and your loved ones to have done some planning.

What exactly are estate planning documents? A basic estate plan for a person living in the State of Texas, with all of their assets located in Texas, is a Will, a Durable Power of Attorney for business purposes, and a Medical Power of Attorney.

A Will is the centerpiece of most Texas estate plans. It does several important things:

  1. It governs the disposition of your property upon your death. Who does it go to -- surviving spouse, children, other relatives, friends, charities, or some combination? In what proportions does it pass? Do you leave it outright or in trust, or partially in each form?
  2. It governs who will administer the estate upon your death. It appoints an executor. It is the executor's job to probate the Will and collect the assets, pay the debts, taxes, and expenses of administration, and then distribute the assets to the persons entitled to receive them.
  3. The will may appoint a trustee. There are a number of reasons why some bequests might be made in trust:
    • For management purposes: If you are leaving your property to a minor, an incapacitated person, or to someone who does not have the skill or inclination to manage property;
    • For control purposes: If you want to give one person the use of the property during their lifetime but control to whom it passes on that person's death; or
    • For tax reasons: There are some tax advantages that simply can't be used without a trust.
  4. Your Will will provide how your estate will be administered. For example:
    • Is the administration going to be independent of court supervision?
    • Are the executor or trustee going to be required to give bond?
    • What flexibility is the executor going to have in paying debts and making distributions?
  5. If you have minor or incapacitated children, you can name a guardian in your will.

The other part of a basic Texas estate plan is the use of powers of attorney. There are two:

  1. Durable power of attorney in which the principal appoints someone to manage their financial affairs, which authority lasts beyond incompetence; and
  2. Medical power of attorney in which the principal appoints someone to make medical decisions for them when they are not able.

If you have not planned for incapacity, a guardianship could be required. Guardianships are expensive, time consuming, and inconvenient.

If you do not have a will, a durable power of attorney, and a medical power of attorney, no matter what your age, I urge you to get these in place. If your parents do not have these documents, I urge you to talk to them about it. If your adult children do not have these documents, I urge you to talk to them about it also. No one is too old, and no adult is too young, and it does not matter how much money you have (or don't have).

This column is published for informational purposes only. It should not be construed as legal advice and is not intended to create an attorney client relationship. The views expressed are those of the author and do not necessarily reflect the views of the author's law firm or its individual partners.