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Dallas Estate Planning Law Blog

Estate planning will likely prevent dying without having a will

Unbelievably, it has been revealed that the musician Prince had no will at the time of his death. That is considered to be a major mistake by experts in Texas and elsewhere with respect to good estate planning principles. In fact, it is one of the four big mistakes of estate planning, according to some experts, and it demonstrates in this case that celebrities are as prone to procrastination as the rest of us.  

The lack of a will can be devastating to some family members who will not share in a loved one's estate simply because the state statute where the decedent lived will govern the order of distribution of assets. Therefore, even though the decedent may have favored a beloved sibling, that person may go without any inheritance under the state's statutory law. In addition, a living trust is a good idea for those who wish to maintain privacy about their affairs.

Long-term care planning is supported by family discussions

Many people throughout the country and in Texas have a sense of immortality that defies logic and reality. They believe, for example, that they will not become so disabled or unable to care for themselves at any time in the future such that they will need outside help or institutional care. When considering the expensive cost of long-term care, many people rationalize away the need for long-term care planning.

While one can admire the positive thinking that puts such thoughts out of reach, the statistics defeat the idea that a person will likely escape the need for outside help some day. Since the facts suggest that most people will benefit greatly from having a plan in place, it may be time for people to revise their unrealistic thinking and at least examine the options available. Perhaps the strongest way to do this is to start with obtaining an overview from a financial planning expert and from one's estate and long-term care planning attorney.

Estate planning now includes reference to one???s digital assets

Traditional estate planning in Texas has not yet caught up with the intricacies of the digital assets that most people are at least beginning to amass. These assets can include but are not limited to such things as PayPal accounts, bank accounts, intellectual property (such as blogs, e-books, poetry and other works of art), along with domain names and other electronic compilations. The best estate planning strategy to keep up with the growing list of assets that one may want to dispose of properly at death is to first of all prepare a thorough inventory of the items.

The list should give web addresses and passwords necessary to access accounts. The list should be provided to one's personal representative along with a letter of instructions describing how to handle each asset. If necessary, an asset may have to be included in one's will and bequeathed properly and legally in that manner.

Estate planning and long-term care elements may be combined

A trend for estate planners in Texas and elsewhere is to include long-term care planning as one of the initial funding tasks in the estate plan. Because people are now living significantly longer than in the past, the estate planning attorney must factor long-term care provisions into the estate plan. This may impact on how much can be bequeathed in one's will to the beneficiaries. Knowing in advance how this will be handled is better than being 80 years old, in declining health, and facing imminent nursing home care with no plans in place.

It may be that the client is capable of funding long-term care insurance. If so, that will fit easily into the plan and may be all that is needed. However, the hitch is that about one-third of all owners of such policies see them lapse prior to getting any value out of them. This may happen due to unaffordable premium increases. It may also occur due to the advancing age of the insured, which leads to some cognitive decline, and hence, a forgetfulness to pay premiums.

Estate planning seeks to avoid conflict among the beneficiaries

Residents of Texas who choose to do estate planning are often concerned about whether their adult children will argue over the parents' choices in their wills for dividing the inheritance. One survey notes that over half of all Americans intend to leave an inheritance approaching an average of about $200,000. Good estate planning procedures and a close working relationship with one's estate planning attorney will likely establish a low risk of arguments among the children after the testator's death.

Experienced estate planning attorneys generally agree that the openness of communications between parents and their children about estate planning choices will go a long ways to diffuse anxiety or resentment. The best policy is for the parents to give the decisions and the rationale to the children, preferably even in a group family meeting. Where that is not possible, the parents should make strong efforts to discuss their plans personally with each child and obtain an understanding with each of them.

Elderly planning is needed to provide for long-term care

Whether one resides here in Texas or in another state, retirement and estate planning is not enough these days for elderly persons. One must also engage in elderly planning for potential long-term health care costs at the later stages of life. Long-term care means the daily activities in which the elderly become less self-sufficient, such as bathing, dressing, eating, doing the wash, the dishes and going to the bathroom. For people with a net worth of $2 million or more, it may be a non-issue because they may be able to afford to pay cash for home health care, including nursing care.

For others who are unable to pay the estimated range of long-term health care bills, some elderly planning should be done as early in life as possible to avoid the excessive costs that come with late planning. Long-term care insurance is often mentioned as a solution. If it is started early enough, it may work; however, the premiums will be prohibitive if purchased later in life.

Life insurance can play important role in estate planning

Life insurance can be a strong component of estate planning in Texas and elsewhere. Most people, however, do not place the purchase of life insurance on their priority lists. Life insurance can pay for funeral expenses and post-death bills. It can provide funding for special trusts and may be used to pay tax obligations after death. Of course, there is the general estate planning purpose goal of providing an extra level of financial security to one's loved ones after death.

For younger families, a working parent should consider purchasing enough insurance to cover his or her income for five to 20 years. The policy can also account for getting the children through college. The good news is that a substantial amount of basic term insurance coverage can be bought for modest premiums by younger persons in the prime of life.

Long-term care facilities to receive interoperable EHRs

The federal government is giving a boost to long-term care and other government-funded health care facilities in Texas and nationwide, according to an announcement by the Centers for Medicare & Medicaid Services. Authorities announced that states would be permitted to request 90 percent enhanced matching funds from CMS to connect to a health information exchange . The program will be beneficial to health care providers and the health exchange networks, and it will lead to stronger long-term care facilities through the enhanced ability to make improved health care decisions.

The main governmental goal is to improve Medicaid-funded services by improving care coordination through the seamless sharing of health care information. Providers will be able to know the medical background of a patient within minutes or even seconds of opening a patient file. The CMS intends to do this by bringing interoperable electronic health records into the mainstream of the Medicaid network of health care providers.

Online assets are another part of the estate planning package

Along with the traditional estate planning documents that are prepared for residents of Texas, it is suggested that they must now also consider providing some basic but comprehensive information regarding online assets to their estate planning attorney and their personal representative. At this time, there is no framework of laws that designates what happens to online possessions after one dies. The safest estate planning practice is for the individual to make a written inventory of all online assets and provide that list to the persons who need to find one's legal documents at death.

There are many potential issues pertaining to one's interests online. Proprietary business or literary products, manuscripts, contracts and the like may now be stored on one's hard drive and, more often these days, with a copy in the cloud. Proof of purchases, leases and other ownership documents may also be stored in areas that only the owner would guess to look, and be able to access.

Single people will also benefit from estate planning documents

In some respects, a single person may have more of a need for estate planning documents than a married one. A single person may be more adrift with no identifiable representatives to act on his or her behalf simply because of there being fewer obvious family ties. In Texas and all other states, an important goal of estate planning is to make sure that a person is taken care of in the most efficient way should he or she become incapacitated.

Where there is no spouse officially listed as a co-owner on one's accounts or property, it may become more difficult for that property to be used on the owner's behalf should he or she become incapacitated. A sudden critical illness without prior estate planning may put the individual in the hands of unknown doctors without any input from trusted family members or friends. An incapacity making a person unable to function, care for him or herself, and unable to handle monetary affairs may result in substantial legal fees and other expenses if estate planning documents are not in place.

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