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Dallas Estate Planning Law Blog

Estate planning can benefit by the use of living trusts

There are many reasons why an estate plan in Texas might include the use of living revocable trusts. Such living trusts give the grantor the opportunity to distribute assets while alive and to fashion trusts in the shape and manner desired to provide for one's heirs. Because they are revocable, the grantor retains control over the assets should changes be desired.

A trust can be funded with cash, life insurance, securities or any other assets. The popularly cited benefit of living trusts is that they do not go through probate at death. Thus, they are kept private as opposed to testamentary assets, which are a part of the public record of the decedent's estate.

Celebrities make mistakes in their estate planning provisions

Mistakes in the estate plans of recently deceased celebrities can be useful learning examples for residents of Texas or elsewhere. For example, a living trust is attractive to celebrities and many people because the terms remain private: it does not go through the public probate process at death. However, a seemingly unimportant estate planning mishap can defeat one of its major goals.

Thus, for example, Robin Williams wanted to provide for his three children by setting up an irrevocable living trust, which gave him the added benefit of the terms being private. However, the plan did not say precisely what would happen if a co-trustee passed away. When it actually happened, the surviving trustee was compelled to file a petition to request the court to appoint a successor.

Elderly planning includes choices of agents and caregivers

Residents of Texas and elsewhere may sometimes have difficulty deciding which children or loved ones to designate to handle one's individual estate planning and long-term care needs. While one's spouse is the natural first choice, it may turn out that the spouse passes away first and leaves a void in the documents, unless you have alternative choices included in them. Therefore, it's generally advisable to discuss these questions with your children and to make mutually understood elderly planning decisions prior to drawing up the documents.

Putting a long-range plan into place, with alternative choices ready to spring into action, and with all parties agreed on future contingencies, is a good thing. This will avoid a lot of worrying and revising of plans later on, if and when one reaches a state of incapacity. It may not be possible to get unanimity among all of the children or even to get them all to participate.

Living will provides security for final healthcare decisions

Estate planning in Texas includes the area of making medical decisions for your loved one in the event of incapacity. Advanced directives are used to provide guidance for medical decisions after incapacitation and the inability of the loved to communicate his or her own wishes. One commonly used directive is the living will.  It's important to remember that this and other directives should be discussed with the loved one while still alert and communicative so as to assure his or her wishes are carried out.

The living will is made by the loved one while he or she is still alive. It tells the doctors and hospital personnel how the person wishes to be treated in a situation where the individual is unable to express his intentions or give informed consent. Generally, the living will is used most popularly to tell hospital officials and doctors that the individual does not want to be on life-sustaining equipment where there is a medical determination of brain death or something similar.

Medicaid planning can help to pass assets to one's heirs

Many persons who must enter a nursing home or long-term care facility in their later years will come to rely on Medicaid for payment of the great bulk of the expenses. However, the rules for qualifying benefits in Texas and elsewhere require that a person have limited assets that are specified. That fact has resulted in the growth of Medicaid planning, which re-structures the assets so that when the time comes to request benefits, the applicant will be qualified.

There are some general principles of Medicaid planning, but the actual rules differ from state to state and from case to case. It is therefore necessary for the elder family member, and his or her adult children where appropriate, to consult with an elder law attorney prior to making any decisions or taking any planning actions. In such a consultation, you can best learn the applicable property exemptions and any legal options available to protect the assets.

Important estate planning decisions

In fiction, the death of a loved one is often romanticized to a certain degree. Upon the death of a wealthy character, grieving -- or gleeful -- family members often await the reading of the will, and many are surprised about the division of the assets. However, this is rarely, if ever, the case in Texas. In most cases, copies of the will have been handed out to those it affects. While the idea of surprising a few people may be appealing in the movies, there are actually many conversations that could help smooth the process of estate planning.

While most people think of estate planning only as deciding who will receive what assets, there is actually much more to it than that. For example, there may be a family business at stake. By having conversation with family members, a business owner can determine who is interested in running the business, for example. Additionally, such conversations give people an opportunity to explain some of the decisions they have made.

Long-term care insurance makes sense for elderly planning

Long-term care insurance (LTCI) is usually a good idea for someone 55 to 70 who wants to avoid the potential financial hardship that can occur if a nursing home or home-care becomes necessary. The U.S. Dept. of Health and Human Services estimates nearly 70 percent of people who reach age 65 will need long-term care at some point. That statistic of course applies across the board, including in Texas. Unfortunately, less than one-third of people over age 50 have begun to plan for their potential long-term care needs.

An LTCI policy will pay a daily amount to the provider based on the coverage purchased. The premium is based on age, extent of coverage, health and similar factors. Although seniors have often been reluctant to be bound to a premium for years on end, it may be possible to limit that period to five years.

Living trusts can be combined with a will in the estate plan

There's generally no good reason in Texas or elsewhere why you can't have both a traditional testamentary will and a living trust at the same time. Both of these legal instruments specify what should be done with certain assets upon the owner's death. Living trusts are similar to wills in that respect but the assets are conveyed to the control of the trust during life. In the case of the will, the assets are not transferred until after death and probate of the will.

The living trust does provide some distinct advantages that are worth considering, according to one certified public accountant who is also the president of the National Association of Estate Planners and Councils. For example, the estate at death can be administered more quickly because the living trust assets do not go through probate. This allows for probate assets to be eliminated or minimized. The decedent's estate may be opened and closed in rapid order with no waiting, supervision by the court, or ruminating about what is the status of the estate.

Term insurance is a useful tool that can avoid probate expenses

In Texas and all other states, term life insurance can serve a number of uses for estate-planning purposes. Life insurance generally does not go through probate but passes directly to the named beneficiary. In the event that there is no named beneficiary, the proceeds will go to the estate by default and the funds will be subject to probate. In that instance, the life insurance proceeds will be counted as part of the gross estate of the decedent.

The more common situation, however, pertains to the term insurance that has a beneficiary named in the policy. Term insurance generally expires at the expiration of the term. The policy may be effective until the person reaches age 85. If he lives beyond that age, the term has expired and the life insurance expires, causing a forfeit of all premiums paid. Due to these risk features, term life insurance can be significantly more affordable than whole life or other products.

Timely elderly planning helps both the parent and the caregiver

In Texas and elsewhere, being a caregiver for an elderly loved one can be a multi-faceted, daunting task. In addition to the emotional and physical demands of spending many hours each week assisting the parent with a variety of tasks, there are substantial economic demands that can take a toll. That's why elderly planning is an important function that can establish a successful framework for satisfying the many different needs of both the elderly loved one and the family caregiver.

It's very difficult to try and keep up with the many personal needs of an elderly parent, and it is often found that the task should at least be shared with professional caregivers. This is especially true where family caregivers also have full-time or part-time jobs. In addition, legal planning must occur to set up a group of necessary legal instruments.

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Austin, TX 78734
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Addison, TX 75001
Phone: 972-685-5202
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