It is prudent to take the steps to create an estate plan early on so that everything will be prepared in case some untimely health problem arises in one’s later years. If a person becomes disabled and unable to care for his or her own financial affairs, there are critical estate planning tools here in Texas and in other jurisdictions that should be in place. Thus, for example, a power of attorney giving authority to the maker’s chosen representative, if put in place early enough in life, will assure that the right person will be taking care of one’s affairs.
Furthermore, a disability that leads to incompetency will be a costly matter for one’s estate where there is no power of attorney. It will create a need for a court-appointed guardian of the incompetent’s estate, and even if that guardian turns out to be a family member, legal fees and administrative costs will eat up substantial funds. The guardian, even if it is a trusted family member, will have to present costly accountings to the court periodically and, in that way, continue to reduce the funds available.
This becomes even more costly over an extended period of time, and where the guardian is not the one whom the incompetent would have chosen, the assets may be administered against the known wishes of the incompetent. Again, it is a power of attorney appointing a family member or members that can result in the saving of substantial funds for administrative expenses. It may also result in much more efficient administration of the incompetent’s affairs and financial assets.
In addition to the power of attorney, other legal instruments are vital to an estate plan in Texas and elsewhere. These may include a will, living trusts, healthcare directives, a living will and testamentary trusts. It is best to go over these options with an experienced estate planning attorney, along with a financial planner in appropriate cases. In that way, one can be assured that the planning has been done according to one’s wishes and in accordance with the most advantageous laws under the circumstances.
Source: auburnpub.com, “Carr: Why you need an estate plan“, Timothy Carr, Feb. 12, 2015
