Texans have the freedom to distribute their property any way they choose when they die by making a Will. However, if they die without Will, their assets will be distributed according to a statutory formula that doesn’t take into account their wishes and unique circumstances. It is imperative to make a will according to your wishes so that it may be passed on to your loved ones.
For individuals and couples that have acquired a significant amount of assets, estate planning would be an effective tool so that the tax implications on the estate may be less. Federal tax laws change and it may be very costly to your loved ones.
A Last Will and Testament is a legal document that allows you to identify your beneficiaries, designate the way in which your property will be distributed, nominate a legal guardian for any minor children, and nominate an executor to manage your estate, pay your debts, expenses and taxes, and distribute your estate according to your wishes.
To make a valid Will in Texas, you must have legal capacity, testamentary capacity, and testamentary intent. Additionally, certain formalities must be followed.
You have legal capacity to make a Will in Texas if you are 18 years of age or older, are or have been lawfully married, or are a member of the armed forces of the United States.
Testamentary capacity refers to being of “sound mind”. You have testamentary capacity to make a Will in Texas if you have the mental ability to understand:
- the business in which you are engaged;
- the effect of making a will;
- the nature and extent of your property;
- the persons who are the natural objects of your bounty (e.g. your relatives);
- the fact that you are disposing your assets;
- how all these elements relate so as to form an orderly plan for the disposition of your propertyYou have testamentary intent if at the time you sign your Last Will and Testament, you intend to make a revocable disposition of your property to take effect at your death.In addition to legal capacity, testamentary capacity and testamentary intent, certain formalities need to be followed for a Will to be valid. The formalities that need to be followed depend on what type of Will you have made.
Texas recognizes two types of written Wills.
- An attested Will is the most common type of Last Will and Testament. To be valid, it must be in writing, signed by you, or another person at your direction and in your presence, and attested in your presence by at least two credible witnesses over the age of 14.
- A holographic Will is a Will that must be written completely in your own handwriting, and signed by you. There is no requirement that it be signed by any witnesses.When a Will is probated, the self-proving affidavit substitutes for in-court testimony of witnesses as to the validity of the Will, which saves considerable time and expense.
- If a Will does not meet all the requirement set forth by the statutes, it will be declared invalid, meaning that your estate could be distributed according to a statutory formula rather than the way you would have preferred.
- The Texas Statutes provide the person making a Will with the option of adding a self-proving affidavit to the Will. A self-proving affidavit is signed by the person making the Will and two witnesses before a notary public.
What is a Power of Attorney?
A Power of Attorney is a written document that authorizes another person to perform some lawful act that you could do if you were personally present at the time. The Power of Attorney can only be recognized and accepted by others while you are still alive. And, unless you make the power durable, it will not be recognized or accepted by others when you are incapacitated by coma or mental defect. Some examples of what a Power of Attorney can be used for are as follows: transfer of a car title; transfer of title to land; opening or closing bank accounts; entering into contracts or other business affairs; settling claims for or against you; providing care and maintenance for your family.
The Power of Attorney protects the person who agrees to let someone else transact business for you. Therefore, if the person does not feel adequately protected by the Power of Attorney, they do not have to accept the authority of the person trying to take action on for you. As an example, a judge would not accept a relinquishment of your parental rights signed by someone producing a General Power of Attorney.
There are basically two kinds of Power of Attorney. A General Power and a Special Power. A Special Power of Attorney is preferred because it specifically identifies and limits the authority of the person trying to act on for you. Texas has adopted a Statutory Durable Power of Attorney that allows you to select general or special powers.
A Power of Attorney generally becomes effective on the day you sign it. It will remain in effect until the date of expiration written within the document or upon your death or disability. If you desire to terminate a Power of Attorney that you have given to another person, you must specifically revoke that power. If the original Power of Attorney was recorded in county records then the revocation must also be recorded in county records. You must also deliver a copy of the revocation to the person having your Power of Attorney and provide notice of the revocation to any person who might be expected to conduct business with the person on your behalf.
A power of attorney also sometimes referred to as a “living will,” may be coupled with a will. In some unfortunate instances, nonprobate assets such as bank accounts are payable on death only (“p.o.d.”) In a situation where a loved one may be in a coma or unconscious for long periods of time, this may hinder the financial situation. It puts the family in a financial strain if there is money that is inaccessible and bills that are due. To avoid this common issue, a power of attorney may be drafted so to achieve the person’s objective in the case of an emergency.