Estate Planning

Last Will and Testaments. Wills provide for the appointment of Independent Executors who, in
Texas, operate independent of the Probate Court after the Will is admitted to probate and the
Inventory has been filed. This makes probate in Texas very simple.

Living Trusts are designed to hold title to your assets while you are living and, at death, pass title
to the assets as you direct in the Trust, without the necessity of probate.

INCAPACITY DOCUMENTS
Financial Powers of Attorney. Powers of Attorney are designed to avoid the complication,
expense, and trouble of a Court supervised Guardianship which could be necessitated should you
suffer a stroke, senility, Alzheimer’s, an automobile accident, or any other disabling, incapacitating
event. A Power of Attorney is no longer valid as of the death of the person who made and granted
the Power of Attorney.

Medical Powers of Attorney. These Powers of Attorney authorize your designated agents to make
health care decisions for you, and again without the necessity of having to have themselves appointed
as Guardians for your benefit through the Probate Court. Guardianships are something which should
be avoided in Texas at all cost.

HIPAA Designations. The federal Health Insurance Portability and Accountability Act (HIPAA),
45 CFR Sec. 164.508, limits disclosure of your medical information unless you authorize it. Of
course, it is essential that the persons whom you trust have access to your medical information so
that they can make medical decisions for you if you are incapacitated. By signing a HIPAA
Designation and giving it to those whom you trust, they will then be authorized to submit it to
medical providers to, in turn, secure the information which they will need on your behalf.

Declarations of Potential Guardian. Declarations of Potential Guardian are designed to
supplement the Financial and Health Care Powers of Attorney. The document prohibits anyone from
being appointed as Guardians other than those you name in your Powers of Attorney, and in the order
you name them.

Declarations of Appointment of Guardian for My Children in the Event of My Incapacity. This
document appoints the persons you have selected to serve as guardians for your children should you
become incapacitated.

Directives to Physicians (Living Wills). You will remember that “Living Wills” are authorized
pursuant to the Texas Natural Death Act, and should you be in a coma, for example, and unable to
make decisions as to termination of life support systems in the event of a terminal illness, then you
authorize your appointees to make that decision for you, but only within the guidelines as set forth
in your Directive.

Funeral Power of Attorney “FPOA”. Normally, a power of attorney ceases as of the death of the
person who gave the power of attorney. But there is a special exception in Texas law which
authorizes a person to appoint one or more individuals to make their funeral arrangements following
their death. An FPOA may be appropriate any time a person perceives that there might be conflicts
between family members as to how the funeral and burial should be conducted, or any time that a
person has no immediate family members and there is a need to have someone appointed to make
the final arrangements following death. And, even though a person might have a pre-paid funeral
plan, it is still appropriate to have an FPOA if the conditions exist as previously discussed in this
paragraph because of last minute details not covered in the prepaid plan.

The American Taxpayer Relief Act of 2012 (H.R. 8) was passed by the United States Congress on January 1, 2013, and was signed into law by President Barack Obama the next day. As it relates to Estate, Gift and GST tax, the $5 million dollar exemption for individual estates ($10 million for couples) remains in place. Note that indexed for inflation, the $5 million dollar exemption is currently $5,250,000. Estates would be taxed at a top rate of 40% (up from 35%). In addition, the exemption amount (for gift, estate and GST taxes) remains unified and is permanently extended after 12/31/12. Portability of the unused credit is also made permanent.

This new law will certainly be something that individuals will want to consider in their Estate Plan and as such will want to visit with their financial, accounting and legal professionals to determine whether any revisions to their planning is necessary in light of this new law.