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Dallas Estate Planning Law Blog

Things to keep in mind when estate planning

A professional with many years of experience in the financial and trust fields has shared her suggestions regarding planning for the future. She has offered recommendations on best practices for estate planning and administration. Understanding what is successful and what is not when making plans for an estate is important for Texas residents and others around the country.

The expert stresses the importance of actually developing an estate plan. Failing to complete a plan could result in an estate not being distributed in the way it was intended. Once someone is deceased, the heirs would not be able to make changes in the way the estate assets are divided.

Long-term care issues important to investors

As the average age of the population in the nation continues to increase, many Texas residents are concerned about what will happen to them in their retirement years. Plans for having sufficient income when someone retires is a major consideration. Another topic frequently discussed is the availability and cost of long-term care. A recent survey conducted by financial advisors reveal that this topic was of great concern to affluent investors. However, experts acknowledge the topic is important to everyone.

Advisors define long-term care as any care persons might need if they are unable to care for themselves. While nursing homes and other assisted-living centers often come to mind when thinking about this topic, many in-home services are now available. Experts recommend that everyone consider developing a plan while they can to protect retirement savings from being depleted.

Avoid hidden estate planning mistakes

Many Texas residents and others throughout the country don't have a will. They have given little to no thought about estate planning, perhaps because they don't think it is necessary. However, even those with modest assets can benefit from having a plan in place. It is equally as important to carefully review an estate plan to avoid potential problems in the future.

Those people who have taken the time to put estate plans in place tend to believe that, because they have a formal document signed by all the necessary parties, they will not have any issues. However, financial experts report that problems frequently arise when investors have not properly reviewed and updated their plans. Unfortunately, when these types of problems are discovered, it is too late to remedy them.

Willy Wonka and long-term care lessons learned

There are many issues for Texas residents to consider when planning for retirement. Although they are expensive, long\-term care policies are valid options for individuals to consider in investment portfolios. A tax professor who also advises on retirement and estate planning recently shared his thoughts on how a scene from a popular children's book/movie confirmed the importance of long-term care insurance policies. He shared the details of a scene from "Charlie and the Chocolate Factory" (or the original, "Willy Wonka and the Chocolate Factory") involving Charlie and his grandparents.

Charlie's grandparents all live in his home and require active care from family members. The professor noted that the scenes depict a different era, but there are lessons investors today can learn. First, statistics show that adults aged 65 and older will need some form of long-term care assistance. Whether it is temporary or for an extended time, the demand for these types of services will increase as the population gets older.

IRA rules can make probate administration complicated

Many Texas residents have individual retirement accounts as part of their investment portfolios. IRAs are attractive to investors due to beneficial tax considerations. However, investors should be aware of tax rules when including an IRA in their estate. A recent ruling by the U.S. Tax Court details a complicated case involving an IRA involved in probate litigation.

A man in another state passed away in 2006, having specified in his will that most of his estate would be left to his wife. The estate included a traditional IRA and a vintage motorcycle. The funds in the IRA were frozen until the issue could be resolved after the man's son contested the will.

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.

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