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Dallas Estate Planning Law Blog

Common misconceptions about estate planning

It is unlikely that most Texas residents have given much thought to how family members and loved ones will be affected after their death. However, it is a subject that needs to be addressed to ensure that someone's assets and property are distributed exactly as desired. While many may believe that estate planning is only needed for the wealthy, it can be a valuable process to help avoid family conflicts. Financial experts hope to convey the need for comprehensive estate plans by shattering some commonly held misconceptions.

The size of someone's estate is not the only determining factor when deciding to develop a plan. Appropriate documentation is necessary to ensure that assets go to the designated beneficiaries or that a business stays within a family. While the benefits of an estate plan mainly involve financial considerations, there are other benefits as well. Some plans may specify guardianship for children or provide protection for special collections. Another benefit is the privacy offered by having a trust.

Address long-term care needs in estate planning

Many Texas residents and others across the nation are caring for elderly parents. A frequent topic is likely to be the difficulties experienced in finding quality care at an affordable cost. The reality is that everyone is aging and if life expectancies continue to increase, more people will need long-term care, not only for parents, but for themselves.

As efforts are underway to replace the Affordable Care Act, a close watch is on any new legislation proposed. Unfortunately, early proposals do not adequately improve the systems for caregiving support and long-term care. Families hope that actions will be taken to help remedy a seemingly broken process.

Protect beneficiaries with a living trust

Estate planning is a major concern for many Texas residents and others around the country. Often, the goal for most individuals is to develop a plan that will avoid probate court. A living trust may be a viable option that provides inheritance protection for beneficiaries.

Assets may be placed in a living trust during someone's lifetime, then transferred to designated beneficiaries after his or her death. This may be wise for those who have beneficiaries with special needs, drug or alcohol additions, turbulent marriages or questionable spending habits. The assets will be protected for the beneficiary when placed in the living trust. There are several issues to address when considering if a living trust is the right choice for an estate plan.

There is more to consider in estate planning than taxes

Many Texas residents have likely not given a lot of thought to planning for the time when they pass away. While many may believe that estate planning is reserved for the wealthy to avoid heavy inheritance taxes, financial advisers recommend that most families need a plan. When individuals have children, grandchildren, parents, bank accounts or other assets, an estate plan is important to provide protection to families.

A major component of an estate plan is a will. Roughly 44 percent of persons nationwide had a will, according to a 2016 poll. Without a will, there is no direction to specify how someone's assets should be distributed. These decisions will be left to a court and could prove to be expensive.

It is important to understand options for long-term care

Growing old is an inevitable part of life for Texas residents and others across the country. However, many do not spend a lot of time preparing for something in the future, especially when one must consider the possibility of becoming ill or incapacitated. It is important to address the issue of long-term care planning when someone is still capable of decision-making.

Elder care experts recommend taking time to completely understand what long-term care is and the different options available. Long-term care can range from having someone help with routine tasks at home to full-time care in a nursing home. It can include medical care or assistance with regard to a variety of physical activities. Age is not always the determining factor for who might need long-term care. Someone suffering from a debilitating disease might require ongoing assistance.

Avoid a lengthy probate process with a testamentary trust

Estate planning is an increasingly common practice among Texas residents and others around the country. More people are coming to the realization that planning for the future is not limited to the wealthiest investors. The goal for many when developing a plan is to ensure that their heirs can avoid the probate process. By doing this, most hope to save both time and money. Financial experts recently discussed a method to minimize the time for probate.

One popular suggestion is to establish a testamentary trust if a person does not need or want a revocable trust. While probate may not be avoided, a testamentary trust can greatly shorten the process. After liabilities of the estate are paid, the assets are distributed to the heirs by the executor of the trust.

Asset protection vital in long-term care planning

Many Texas residents and others across the country have trusts established that eliminate the need for probate in the event of death or incapacity. However, these traditional trusts do not provide protection for an estate against creditors either when someone is living or deceased. Some investors are now considering the use of an irrevocable trust to protect themselves and their heirs against high long\-term care costs. This type of trust can also prevent loss of non-liquid assets.

The country's Department of Health and Human Services has reported that the average cost of long-term care is increasing at a high rate. The agency's study claims that half the people requiring services will need financial assistance to pay for necessary health care. Very few people have the liquid assets needed to cover the cost of long-term care.

Avoid these mistakes in estate planning

Many Texas residents and others around the nation may think about the legacy they will leave behind one day. However, most avoid discussing it since it involves thinking about a time when one will no longer be around. While it may be a sensitive topic, estate planning is vital in ensuring that one's assets are handled as desired.

Experts warn that there are a variety of mistakes frequently made as people plan how their estates will be distributed after they are gone. One potentially costly mistake is failing to include a see-through provision on a trust. The tax implications can be significant if this provision is not in place. Also, regarding trusts, there are problems when schedules attached to the trust documents are incomplete or blank. None of the schedules should be blank, so it is critical to make sure all the information is complete and correct.

The probate process in Texas

As one ages, mortality becomes an important issue. The individual often begins to consider what will happen with and to loved ones upon his or her death. Furthermore, the Texas resident usually addresses the inheritance that each of these loved ones should receive as a part of the estate planning process. Perhaps one of the most misunderstood parts of the estate planning process is probate.

In its basic form, probate is simply the process in which the personal representative acknowledges to the court that proper legal proceedings were followed and the wishes of the individual as indicated in the will were complied with. Every once in a while, a will is contested, thus adding to the probate process. However, the majority of wills are uncontested, and the personal representative is able to see to it that the estate is settled.

Experts stress importance of long-term care plan

Many Texas residents and those elsewhere around the country make plans for their retirement years and invest currently so that financial provisions will later be available. However, most do not consider their health or physical capabilities in making these decisions. Yet, long-term care needs could greatly affect someone's financial position should an illness occur.

In fact, the nation's Department of Health and Human Services estimates that nearly 70 percent of citizens will require some sort of long-term care after they reach age 65. Medical expenses could prove to be exorbitant, while many may need assistance with routine activities of daily living. These activities include such tasks as bathing, eating, dressing or going to the bathroom. Both skilled care and custodial care may be required.

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