What should I think about?
When you are ready to prepare an estate plan, you’ll need to make some important decisions. Your lawyer will certainly guide you through the process and advise your about those decisions, but it is helpful for you think about certain things beforehand so that your discussions are productive.
So, what are some things you should think about before meeting with your lawyer?
First of all, you’ll need to think about your finances and property and about how you would like them distributed after you pass away. Most people already have this in mind.
More importantly, though, you should think about people who you seriously trust. Identifying trustworthy individuals is important because you will need to designate trustworthy people to fulfill important responsibilities that could affect you and your family.
For example, you might need to designate an Executor, who will manage the affairs of your estate after you pass away (such as settling debts and distributing property to your family members). Or you might need to designate a Guardian, the person who will effectively become the parent of your children after you pass away. Those are just two examples. It might also be necessary to designate agents to serve under a Financial Power of Attorney or a Medical Power of Attorney, among other documents.
Because of the variety of estate plan documents and related choices, it is often easier to evaluate your potential designees through a framework of three broad categories:
- Organizational skills and financial responsibility
- Life and death decisions
- Established relationships with your children
Organization Skills and Financial Responsibility
Almost every estate plan will include a designation of an Executor, or a Trustee, or a Financial Power of Attorney agent (or a combination thereof).
These capacities serve different functions in different contexts, but each one involves making financial decisions and keeping records. Accordingly, you should identify someone who you would trust to make responsible financial decisions. Remember, these financial decisions will impact you and your family, so choose wisely.
(Note: If you do not trust any friends or family members with these responsibilities, there are options for designating banks or attorneys as Trustees. This can be helpful in many situations. You do have to pay for professional management out of your estate’s assets, though.)
Life and Death Decisions
A Medical Power of Attorney is a document that gives your designated agent the legal authority to make medical decisions on your behalf in the event that you are incapacitated.
Your designated agent might literally be making life and death decisions for you. Who would you trust to make such weighty decisions?
Texas law automatically grants spouses this authority (unless you choose otherwise). If the spouse is unavailable, the law provides “next of kin” options. Accordingly, because most people want to explicitly choose who will be in charge, it is good practice to designate an alternate.
Who would you trust?
Established Relationships with Your Children
If you have minor children, you will want to designate a Guardian. That Guardian will assume parental responsibility for your children in the event that you and your spouse pass away.
There are many things to consider when choosing a Guardian. Of utmost importance, it is important to consider which friends or family members have an established relationship with your children. Who will your children get along with? Who will your children feel comfortable with?
In some cases, this decision can be tricky. You might feel that Uncle John would be the best parent, and that your children get along with him better than anyone else. Perhaps, though, Uncle John isn’t particularly good with managing money, even though he has good intentions. What do you do? You want your children to be happy and have the best parent, but you also want to feel assured that you will safely preserve their inheritance.
In that scenario, it is actually possible to name Uncle John as the Guardian, and to name someone else as the Executor or Trustee to manage and distribute your children’s inheritance while they are growing up. Perhaps Aunt Sally is a CPA and is very organized and good at managing money. In that case, Aunt Sally could serve as Executor or Trustee while Uncle John serves as Guardian.
Ultimately, there are a variety of strategies and options from which you can choose in order to structure an estate plan that reflects your wishes and your family’s needs.