Don’t Get Complicated: A Simple Estate Plan is Best

Don’t Get Complicated: A Simple Estate Plan is Best

You probably don’t need a complex estate plan. Like most Americans, you would likely be served by a simple, straight-forward plan that includes some basic tools. While plans like these are specifically tailored to each client, no matter what type of plan would work for you, these parts of the plan may be found:

  1. Wills. A will specifies how a person’s estate will be managed and divided after his or her death. The will, also called a testament, includes the disposal of all real and personal property. When a person dies without a will or with an invalid will, he or she dies intestate, which means the person’s property is distributed according to the laws of the state where he or she lived. If a will is written due to fraud, mistake or undue influence, the court could void it. The will must also include certain elements to be considered valid.

Some of the purposes of a will include:

  • Allows the author to choose heirs
  • Permits the author to choose an executor and
  • Allows the author to choose a guardian for minor children.
  1. Trusts. A trust holds and protects property for distribution to and for the benefit of others. A person creates a trust and includes his or her assets and/or property. Often, people create these instruments to pass on material wealth to spouses, children or other beneficiaries after death. Some people distribute money to charities through a trust or use them for other legal reasons – to shield assets from tax consequences and from so-called creditors and predators, such as plaintiffs in a lawsuit. However, if the court determines that a trust has been established for some illegal means, it will void the trust. Trust laws address the following: whether a trust is valid and legal; whether it is private or public; and whether the trustee has legally fulfilled his or her duties regarding trust management.
  1. Powers of Attorney. A power of attorney permits Person A (an agent) to act on the behalf of Person B (the principal) and grants Person A the authority to take over certain functions for Person B. These functions can be partial or full and might include specific duties, such as handling stocks, medical affairs, taxes or safe-deposit boxes. Historically, the law would invalidate certain powers of attorney once a principal became legally incapacitated but modern revisions to the law allow certain powers of attorney to allow the agent to continue making decisions for the principal even after the principal becomes legally incapacitated. Such “durable” powers of attorney often take the place of guardianships and can allow trusted family members or friends to assist the principal in the progression of conditions that impede the principal from making financial decisions.
  1. Medical Powers of Attorney. Like financial powers of attorney, a medical power of attorney allows a principal the right to appoint an agent to make certain medical decisions for him if he is unable to make such decisions. Medical powers of attorney are extremely useful in situations when a person is injured or ill and is unable to consent to surgery or care.
  1. The HIPAA Authorization. HIPAA, or the Health Insurance Portability and Accountability Act of 1996, set up federal laws to protect personal health information. While the laws are detailed, HIPPA prohibits sharing information about a patient unless he or she has authorized it. Exceptions include risks to public safety, national health-care concerns, efficient operation of health care needs and related matters. A health-care provider, such as a doctor’s office or hospital, generally can exchange information within the various company branches, such as operations, treatment, and payment.

ATTORNEY CHRIS PARVIN is Board Certified in Estate Planning & Probate Law by the Texas Board of Legal Specialization. Mr. Parvin is the Managing Partner of the Dallas, Texas law firm of Parvin Law Group, P.C. and serves as an Adjunct Professor of Law at Texas A&M University School of Law. Mr. Parvin can be reached by email at chris@parvinlaw.com

Parvin Law Group, P.C. is a Concierge Law Firm in Dallas, Texas with attorneys practicing law in the fields of Estate Planning, Probate, Business Law and Family Law.