Contrary to what some people believe, estate plans are not reserved for the old and the wealthy. It is important for people of every age and income level who want to help protect their finances and avoid future conflicts between family members. Estate planning covers every aspect of your life: financial, personal and family. It is a reflection of how you live and conduct your interpersonal relationships.
Years ago, people lived until their 60s at which time they got sick and died. They may have had family or friends to care for them, but, generally, when people got old and sick, they died soon thereafter. Their biggest concern was who would get their possessions after they were gone.
At that time, a Last Will and Testament was generally the only estate planning tool needed, and most people did not even have that. Intestacy laws in Texas generally provided that family members would get the possessions. For the most part, these family members were the same people he or she would have named as beneficiaries in a Will anyway.
Fast forward to the present. Times have certainly changed. Modern estate planning has to do with much more than who will get your possessions when you are gone. We live in a time where people live longer. Consequently, sometimes living for longer periods of time can lead to living with mental or physical incapacity. Who will be your arms and legs if you become incapacitated? Who will make decisions for you if you cannot make them for yourself? Relatively recent changes in the law now make it possible for you to plan ahead for what might happen if you become mentally or physically incapacitated. For most people, taking advantage of these planning opportunities is much more important than simply designating who will receive your assets after you die. Planning for possible incapacity allows you to decide ahead of time how, where, and by whom, you would like to be cared for in such a situation. Planning for possible incapacity allows you to address issues that could affect the quality of your life while you are still living it.
And if you never become incapacitated, if you never need someone to make medical, financial or care decisions on your behalf, would you have “wasted” the money and effort to do the planning? Have you wasted all of the fire insurance premiums you have paid for your home or the insurance premiums for your car? One thing is certain in this life. You will not live forever. It is safe to say that at least one or more parts of your estate plan will be utilized.
So what documents comprise an estate plan? Glad you asked. Generally, these are the basic documents we include in your estate plan at Hartsfield Law: