Although it happens often in books and movies, surprising someone with a gift from an estate may upend their own plans for their future.

Moreover, a surprise disinheritance can lead to unforeseen conflict and heartbreak in your family. Although situations differ and your safety is paramount, your loved ones will have a better chance to make wise choices if they are aware of your own.

Most importantly, you have the chance to safeguard your wishes and your estate long before your death. For that, you need to work with those closest to you so that they can make decisions if you become sick, injured, or unable to express your own wishes.

Estate Plans for Your Life

Your family and loved ones may be hesitant to discuss this, finding it morbid or painful. However, estate plans involve responsibilities for illness or incapacity as well as for the end of life.

Powers of Attorney

A power of attorney (POA) is a right and responsibility you give to another person, called your attorney-in-fact or your agent. The agent has the power to make certain decisions for the principal, the person who gave them the POA. The POA can meet whatever needs you anticipate, depending on its type—

  • Financial: permitting the agent to make financial decisions and handle bank accounts
  • Special or limited: dispatching the agent to act in a particular transaction or matter, such as a real estate closing
  • Medical: allowing the agent to make medical decisions for the principal and give consent to treatments
  • General: allowing the agent to make any financial or personal decisions for the principal

A POA can end on a date or an event specified in the document granting the power. The principal can also revoke it whenever they wish. Otherwise, a non-durable POA lasts until that principal becomes incapacitated or dies. A durable or statutory POA continues in effect until the principal dies. A springing POA becomes effective only when the principal has become incapacitated. 

Even if you do not anticipate illness or injury now, it is wise to have a POA in place to allow someone to handle important matters when you cannot. You should carefully consider who you could trust with these responsibilities. If you want to grant multiple POAs, would the parties work well with each other? An estate planning attorney can help you envision what you need so that you can discuss it with your loved ones and prospective agents.

Advance Directives

A sudden injury or illness that leaves you incapacitated can tear your family apart. With an advance directive, sometimes called a “living will,” you can clarify what you want in circumstances that make your recovery unclear, preventing unnecessary frustration and agony for you and your family.

If you are in a terminal or irreversible condition and unable to communicate, this document allows you to direct your physicians in administering treatments that may prolong your life. Texas Health and Human Services provides an example of the form. You may also create a directive for mental health treatment, specifying the treatments you consent to or refuse in case of mental incapacitation.

Your usual medical care team needs a copy of your advance directive. You can also prepare a do-not-resuscitate (DNR) order for emergency personnel outside a medical setting. In any case, your family and friends should understand your wishes to minimize shock and conflict after a major medical event.

Discussing Plans for Your Assets

Your beneficiaries—that is, the people who will receive your assets after your death—need to understand when and how they will receive their gifts or resources. This is also true for those who will receive them outside of probate through trusts or real estate transfers.

Probate, the process of moving the estate through the courts, distributes the assets that are in the name of the deceased. However, the probate process can take months or even over a year. Until it is finished, the beneficiaries generally cannot access the resources in the probate estate. Thus, people often choose to make trusts, which operate outside probate. Trust beneficiaries have certain rights to notice and information.

Creating a beneficiary for a bank account or financial instrument that is payable on death (POD) can allow it to pass outside probate for near-immediate access. In Texas, a transfer-on-death deed allows real estate to pass to a beneficiary outside of probate. If someone does not know that they were a beneficiary to an asset, they may encounter serious problems—especially if that gift requires tax or upkeep.

Unexpected gifts can present real difficulties in some financial situations. For example, disabled people in the US are often reliant on government aid with strict income and asset limitations. An inheritance may cut off the beneficiary’s access to care by placing them outside of the limits. To leave a gift to someone in this position, you can work with them and with an estate planner to create other arrangements, such as a special needs trust (SNT).

Where Do You Start?

To create an estate plan, you will need assistance from an experienced, compassionate planner who understands how families work. The Hatchett Law Firm is ready to help you with your Texas estate needs, whether you and your loved ones are in Texas or out of state. Contact us at 281-771-0560 to schedule a complimentary consultation today.