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Dallas Estate Planning Law Blog

Long-term care planning can protect more assets of a spouse

Medicaid is generally recognized in Texas and all other states as the publicly-funded program that is available to help pay for the escalating costs of nursing home and other residential care in a person's old age. Medicaid exists on a combination of funding from federal and state sources. For a person to be qualified to receive Medicaid assistance for home care or nursing home costs, there are certain qualifying rules to meet. These rules and other considerations may be the subject of a beneficial long\-term care plan that a person or married couple may obtain through consultation with their elder law attorney.

Under current rules, a single applicant asking for home expenses must have $14,850 maximum in assets and no more than $845 in monthly income. For a person needing nursing home funding, the $14,850 maximum in assets also applies. For married couples, when one spouse needs a nursing home, the community spouse may have about $120,000 maximum in assets. Retirement funds in recognized federal depository accounts are exempt from the long-term care requirements.

The simple will is one of several estate planning documents

There are five basic documents that are used most often in estate planning in Texas. They are the will, durable power of attorney, health care proxy, HIPPA release and the revocable trust. Within those categories, there are occasionally sub-documents that may be preferred or applicable. Optimally, the choice of documents will be made in consultation with one's estate planning attorney.

One of the glaring risks of not creating an estate plan is the failure to have a durable power of attorney. That document protects the maker and his or her beneficiaries should the maker become incapacitated and unable to carry out his or her affairs. It gives the power to another person to sign the maker's name and make business and other decisions regarding the maker.

Estate planning updates important for blended Texas families

It is not unusual for Texas residents and individuals across the country to marry more than once. In many cases, additional marriages often result in individuals gaining step-children and families blending together. Because new family members are gained by marriage and ex-spouses are lost through the process of divorce, individuals may want to ensure that they remember to make estate planning updates.

If an individual had created an estate plan during a first marriage, it is likely that he or she named a spouse as a beneficiary to many accounts and intended for the spouse to inherit a considerable amount of their assets, if not everything. Therefore, if a divorce and/or remarriage has occurred, it is important that an ex-spouse is no longer listed as a beneficiary. If an individual dies with an ex still listed, the ex-spouse might receive the designated assets.

Estate planning: Can IRAs be protected in bankruptcy proceedings?

Investors in Texas who consider filing for bankruptcy may have questions about the protection of their Individual Retirement Accounts. Like the protection offered in bankruptcy against the seizure of Social Security benefits, pensions and 401(k)s, IRAs can also be safeguarded against creditors. However, an inflation-linked dollar limit will apply. It may be wise to update estate planning documents to reflect the chosen beneficiaries for the IRA, although they may not receive the same protection.

A significant advantage is that these funds will pass to the beneficiary without being included in probate. However, when it comes to bankruptcy, beneficiaries may not receive the same protection from creditors -- except if the beneficiary is the spouse. If that person files for bankruptcy after taking ownership of the IRA funds, the law no longer sees it as retirement funds, leaving it subject to seizure in bankruptcy proceedings.

Advising an aging parent in matters of estate planning

You might be surprised how many people in Texas and throughout the United States die without having executed estate plans. Discussing the topic with your aging parents is typically a wise decision if they have turned to you for advice to get their affairs in order. Thorough estate planning is a valuable tool for protecting your parents' assets and helping them make sure their final wishes are carried out when they die.

Many elderly people are concerned with financial and medical issues. In helping your mother or father design an estate plan, you may advise them to appoint someone as an authoritative voice to have stewardship and decision-making power over their finances and medical decisions should they become incapacitated and unable to make such decisions themselves. One or more persons can be named in this capacity.

Tips for considering long-term care planning

Considering end-of-life issues can be distressing to many Texas residents. After all, who wants to spend a great deal of time thinking about declining health, decreasing mental acuity and long\-term care planning? It is important to take the time to address these matters, however, and to do so while one's health is still at an optimal level.

Very few people will spend a great deal of time living in a nursing home during their later years. However, some people will require long-term residential care. For those who do, the cost of that care can be astounding, and can devastate an individual's finances. In order to weather the costs of long-term care, it is necessary to take a proactive approach.

Should parents discuss their resources with beneficiaries?

Many families in Texas avoid conversations about old age and death. While it is certainly not a subject on which to dwell, certain discussions are necessary. Heirs often find it difficult to locate statements, settle accounts and more because a deceased loved one's finances were not discussed. Silence about inheritances can also lead to contention between beneficiaries down the line.

Adult children may have many concerns about the finances of elderly parents if they avoid conversation about it. Children may want to make sure their parents will receive the necessary long-term care when the time comes. This includes accommodation, pet care and more. However, having no information about the available resources can cause high levels of stress that may even be unnecessary.

Asset protection of digital assets is part of estate planning

In Texas and elsewhere, there is a lot of attention paid to the expanding topic of the integration of estate planning procedures and the so-called "digital assets" that many people are beginning to amass. It is currently a "catch-up" process as the law tries to keep up with the lightning pace of online computing growth. However, the legal system is adjusting and the process of asset protection of digital assets is quickly getting up to par.

The most important law on the subject is the Uniform Fiduciary Access to Digital Act (UFADDA). This uniform law, already passed in many states, was developed by estate planning experts to integrate digital assets into mainstream estate planning. The law has not yet been formally adopted in Texas but an official committee of lawyers and academic experts is working on deciding whether to accept the law and what modifications may be desired.  

Facts to know during National Long-Term Care Awareness Month

Texas and other states recognize November as National Long-Term Care Awareness Month. Everyone should take a serious look at this topic because the costs of long\-term care can easily wipe out one's retirement assets and deny the funds to one's heirs after death. Well-known statistics make it doubly hard to ignore the subject in that most elderly persons will need such care in one form or another at some point in time.

One major tool used by people to combat these issues is the long-term care insurance policy. One should do some research and determine which companies would be the better fit for the person's age and circumstances. Different companies write their risk positions differently, tending to attract and benefit more effectively certain segments of the elderly population over others.

Texas estate planning permits handwritten wills

Many people have definite ideas about what should happen to their estates after they die. Nevertheless, most people have not made provisions for their assets by writing a will or establishing a trust. For some, it may be the difficulty of considering their own mortality that causes them to delay estate planning. Others may believe making a formal will is too expensive. In Texas, however, there is an alternative.

Formal wills are usually written by attorneys and witnessed by two or more people. For less formal wills, many simply write their wishes by hand. This is known as a holographic will. The obvious benefits of holographic wills are that they do not cost any money, and a person can make one in the privacy of his or her home. However, if certain guidelines are not followed, a holographic will may be more trouble and cost one's estate more money than making a formal will.

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