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Dallas Estate Planning Law Blog

Estate planning should be a priority

Most Texas residents don't give much thought to what might happen when they die or if they become incapacitated. Many believe they do not have enough assets to worry about creating a plan. However, financial experts contend that those with assets over $150,000 total, including their home, should carefully consider estate planning.

Should someone avoid creating a plan for his or her estate, a financial expert has warned of some consequences. First, a family would require a court order to access funds of a deceased person if no estate plan was in place. They would not immediately have access to funds to pay for funeral expenses or other costs. In addition, they could potentially incur significant costs should they dispute a probate court's findings.

Go beyond just signing documents in estate planning

Most Texas residents don't want to think about the possibility of being incapacitated and no longer able to make decisions. They also often avoid discussing what will happen with their property after they die. But those issues must be addressed in detail when estate planning. But even having a plan in place with all the documents signed may not be enough. Experts suggest several things to keep in mind to ensure that someone's wishes are carried out after his or her death.

Financial advisors recommend that an individual carefully examine his or her beneficiary designations. People also need to make sure assets have been appropriately re-titled if a trust is part of their estate plan. According to advisors, many problems arise when these simple steps are not followed.

Consider many factors in long-term care planning

Many Texas residents believe they have invested wisely for the future and that they are prepared to handle any medical expenses they may incur in their retirement years. However, a certified care resource specialist, who has recently studied America's aging demographic, believes that many in the elder population will be ill-equipped to handle their financial burdens. He suggests a careful evaluation of long-term care issues and their effects on the elderly.

The specialist recounted the situation of a successful businessman who thought he had sufficient investments to cover his medical expenses and those of his wife. However, the businessman experienced illness that led to extensive surgery. His wife also became disabled after an automobile accident and required ongoing nursing care. The money he had invested was used to cover their medical expenses. In addition, they received help from family members and Medicaid.

Estate planning seeks to keep beneficiary designations updated

In Texas and elsewhere, the decisions that one makes regarding estate planning are important and they may carry significant consequences. That is why it is always better to have an experienced estate planning attorney as a key part of one's planning team. As always, when doing an important thing it is better to be safe than sorry.

That maxim may be more applicable and important to estate planning than perhaps any other related topic. Choose carefully and select an attorney with the intention of having a lifelong relationship. The assistance and protection becomes far more gratifying when the relationship is one of understanding and caring.

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.

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