The most challenging part of deciding how assets will be distributed following one’s death is trying to understand the documentation and terminology related to estate planning. Unfortunately, a lack of understanding can easily cause a person and his or her family to be unprepared in the event of the person’s incapacitation or death. A few tips may help people in Texas to complete comprehensive estate planning effectively.
First, there is a significant difference between a living will and a last will and testament. The last will essentially declares how a person’s assets will be distributed upon his or her death, as well as who will receive the assets and when. Meanwhile, a living will provides a person’s wishes to medical providers in the event he or she becomes incapacitated or terminally ill.
In a similar vein, two different types of powers of attorney exist. With a power of attorney, a person can designate an individual to make financial and legal decisions on his or her behalf if he or she becomes incapacitated. Meanwhile, a health care power of attorney allows the person to appoint a trustworthy individual to make medical decisions on his or her behalf if he or she becomes incapacitated.
With no last will and testament, Texas law will end up determining how a person’s estate will be dispersed. This determination, however, may be contrary to the person’s wishes. An applicable understanding of the law may help people to complete estate planning in a manner that lines up with his or her desires in the long run.
Source: wealthmanagement.com, “Clearing Up Common Estate Planning Misconceptions“, Scott Grenier, June 10, 2016