Executing a Will Helps Prevent Problems with Death or Disability
authored by Jane E. Lane

Although most of us understand the importance of executing a will, only 30% of us actually take the time to do so. This is incredible considering the ease in which executing a will can be accomplished. The will can be as specific or general as we wish, and as simple or complex as our circumstances warrant.

The possibility of incurring estate tax will only occur if we own assets in excess of $675,000 at the time of our death. (By the year 2006, we will be able to own up to one million in assets and still avoid estate tax.) This is our unified tax credit for gift and estate tax. If we know that we own a taxable estate, or one in excess of this maximum tax credit amount, it is critical to take estate planning measures to avoid or lessen the amount of tax assessed against the estate. A few of these measures include placing property in irrevocable trusts; structuring lifetime gifts or transfers to reduce the value of the estate and avoid gift tax; and by drafting will provisions to qualify for various available deductions and exemptions. If we own a non-taxable estate, then a simple will can be accomplished very economically and quickly.

Planning for disability can also be accomplished relatively simply and inexpensively. Since 60% of us will be disabled before we die, disability planning is crucial in preserving our property and ensuring proper medical decisions will be made for our health care. Most of us are aware that Texas provides for a Durable Power of Attorney for Health Care in which we can name an agent to make decisions regarding our person but only in the event our physician certifies we are unable, or incompetent, to make those decisions for ourselves. We want the person we name as agent to be someone who has knowledge of our medical history and who would make the same decisions we would were we able. Our named agent cannot be our doctor, or even someone who works for the doctor, clinic, or hospital. In Texas, we can also name an agent and alternative agents to make decisions regarding our property in case of our incompetence. This is commonly referred to as a Statutory Durable Power of Attorney. As with the health care Power of Attorney, this power over property decisions only springs into effect upon certification by our physician that we are unable to make those decisions due to disability or incapacitation. The agent we name would have to possess the ability and shills to manage our property. The powers the named agent holds over our property can be extremely broad or we can restrict and limit those powers as we desire.

By naming agents to make our health care decisions and agents to make property decisions, we avoid Court intervention in the event of our incompetency. We avoid having our next of him or an interested party petition the Court to designate a guardian to make our health care and property decisions. Not only is this time-consuming and costly, but also the Court may designate a person as our guardian that we would not wish to serve in that capacity. Of course, at that point we're incompetent, so our choices remain silent unless we have taken the time to execute these simple powers of attorney.

The majority of financial institutions and health care professionals and facilities respect and adhere to these powers of attorney. But as a measure of caution, a belt and suspenders approach might be in order. Just in case a person or entity doesn't want to recognize our powers of attorney (the belt breaks), then we could execute a Declaration of Guardian In the Event of Later Incompetence or Need to act as a our suspenders. In this document, we designate as guardians the same persons for our health care decisions and for our property decisions that we named as agents in our powers of attorney. We can designate guardians for decisions over both health care and property in this same document. we can even expressly disqualify persons from serving. When and if necessary, this document would be presented to the Court and the Judge would then order the designation of persons we choose to be our guardians.

Another less widely known document for disability planning in Texas is the Declaration for Mental Health Treatment, which allows us to make decisions in advance concerning mental health treatment. We can consent in advance to: which medications should be administered; whether we consent to convulsive treatment or not; and our preferences of restraint, seclusion or medication in an emergency situation. This directive will only become effective when a Court determines we are incapacitated and cannot make mental health treatment decisions.

These are some of the ways in which we can plan for death and for disability. All of the documents are statutory created and most are fill-in-the blank forms that are reasonably understandable. Since there are many legal implications, most statutes caution us to at least review the documents with our attorneys. With such easy accessibility and usually low cost, there simply isn't much justification for not taking advantage of the opportunity to control decisions concerning our property and person.