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Dallas Estate Planning Law Blog

Long-term care planning is a critically important family benefit

Everyone faces the issue of aging and dying at one time or another. When one reaches that age in life where the retirement and post-retirement cycles are coming into focus, it is time to take some serious action to prepare under Texas law for future eventualities. One of the recommended procedures is for the elderly parents to join their grown adult children in discussing how their later years will be handled, including charting out a framework for their long\-term care.

For the children, having a meeting with elderly parents may be virtually impossible to organize due to the state of withdrawal in which parents sometimes place themselves. The hesitancy to have a family meeting to discuss the future is not a rare thing. However, those who have taken the steps to get it done are generally in a superior position going forward.

Estate planning provides extra benefits for special needs child

Parents of a child with special needs residing in Texas can establish a number of protections for the care of the child in the event that the parents die first. One of the initial estate planning considerations will be to have a will that appoints a guardian that is thoroughly informed on the child's needs. The parents will also write a letter of instructions that details all aspects of the child's condition, special treatment considerations, the child's special preferences and a list of medical providers.

The creation of a special needs trust can be a vital planning tool to maximize financial support to the child in future years. The funds held in a properly drafted trust will not count as the child's assets for purposes of receiving Supplemental Security Income or Medicaid. The trust can also serve as the beneficiary of life insurance and retirement benefits on the parent's lives. This money can be used for services that are not covered by the government assistance programs.

Some may use insurance as a key strategy for long-term care

One constant debate that occurs in Texas and elsewhere with respect to elderly planning is whether to purchase long\-term care insurance (LTCI). There are pros and cons on the issue. The answer for any particular person and family will depend on the particular circumstances regarding the need for long-term care that exists, and the resources available to resolve that need.

One thing that is not debated is that long-term care is expensive, with the bill going up each year. A private room in a private institution will cost an average of $100,000, and that price may be significantly higher several years down the road. Another fact that is fairly certain is that most people will need long-term care of one degree or another in the future.

Estate planning focus shifts emphasis to asset preservation

One consequence of the increased longevity that people enjoy today is that they need more financial support to survive comfortably through the additional years that may be granted to them. Reportedly, only one in three of us is able to survive financially into our 90s. In fact, a study conducted by a well-known association of retired persons found that two out of three persons were more worried about running out of money than about dying! These facts highlight the importance of estate planning in Texas and other jurisdictions.                                                                                                                                                                              

With the increased years of living and changes in the federal estate tax structures, some of the traditional purposes of estate planning have changed. Those purposes have given way to a more immediate need for estate planning. Protecting assets so that one may live comfortably for many years after retirement is now a central focus of estate planning.

Estate planning saves time, money and legal obstacles

There are some very practical reasons why a person residing in Texas or elsewhere in the country should have an estate plan. Without a will or trust at death, for example, there are some very negative consequences that one's loved ones may be compelled to endure. The lack of estate planning puts one's heirs at the mercy of the intestate laws of the state where one resides at death.

For one thing, one's family members will likely be compelled to incur added attorneys and court fees. Getting an estate started may be more complex without a will appointing the preferred personal representative. Family members may argue over who shall do it, or in some cases, they may all opt out and force additional expenses for the appointment of an administrator. A good way to cause stress and frustration to loved ones that were intended to receive one's assets is to forget to make a will or trust that will get the assets clearly and safely into their hands.

Estate planning is a maze best traveled with professional help

An estate plan under Texas law is a way of designating how one's assets may be distributed at death. Estate planning also takes into account uses of those assets during life and provides for a smooth transition if the owner of the assets becomes incapacitated and unable to take care of his or her own financial affairs while still alive. One of the most important considerations of an estate plan is that it gives the individual the power to direct the disposition of his or her assets as the person desires and not as state law would dictate it.

Estate planning can even provide funding that begins in the benefactor's lifetime, in the form of a living trust. The trust provisions may direct the use of the funds until the donor's death, at which time it will be distributed according to the trust terms. An individual can also set up a testamentary trust in his or her will. This trust does not begin until the testator dies.

Family meetings good for long-term care planning process

A Fidelity survey this year regarding caregiving needs of parents and the ability of children to provide those needs found some increased conflicts over the 2014 survey. Likely speculation says that the better economy in Texas and elsewhere may have a paradoxical effect on whether adult children want to sit down with their parents and have a discussion about getting older, long-term care and dying. In 2014, 52 percent of children said those discussions should occur but this year only 37 percent felt that way.

Elder law specialists have long recommended such a meeting and actually, several of them, so that both generations can get used to the idea and the solutions that are agreed upon. Without the family meetings, children and their parents can have very different expectations about what will occur in the later years of a parent's life. Thus, 72 percent of parents expected at least one of their kids to be a long-term care giver and caretaker, if necessary, whereas 40 percent of the children were surprised to hear that opinion.

Making a will involves important and vital preparations

It seems that the reason that more than half of Americans, including those residing in Texas, don't have a will is because people do not like to think about death. People also have a tendency to view themselves as immortal. That tendency, however, is not amusing or tolerable when a family ends up having to spend substantial funds and engage in a great amount of work to clear up the problems left in the wake of a loved one who passed without having prepared a will.

It is best to put a plan in place for several reasons, not the least of which is the desire to assure a smooth transition for those who are left here to cope and to grieve. Putting a plan in place can ensure that your assets are properly handled and family members are taken care of should something happen. Once the decision is made to make this conscientious effort to protect one's loved ones, there are other principles to observe.

A will is a key concept in the terminology of estate planning

Some people in Texas and elsewhere may find the terminology of estate planning to be somewhat confusing. For example, a will and a living will are two very different things. A will is a testamentary declaration that legally states the testator's instructions for distributing his or her assets at death. A living will is a legal declaration addressed to one's health care providers telling them how to handle one's treatment during a last illness.

The living will may instruct the doctors what to do with life support protocols when the person has become brain dead. Other terminology of note is the distinction between different types of powers of attorney. The durable power of attorney gives the authority to a person's appointed agent to act in his or her behalf to conduct all business affairs during a period of incapacity. This is different from a health care power of attorney that authorizes one's agent to be responsible for health care instructions and decisions.

High costs cause many to ignore long-term care needs

The federal government estimates that 70 percent of persons 65 and older will need help with daily activities during their later years. Despite that figure, other reports indicate that over one-third of people 40 and over have done nothing to prepare for the time when they may need such care. Generally, people throughout the country, including here in Texas, are lacking the confidence that they will be able to pay for long-term care needs, and they have in a sense blocked the subject from their consciousness.

There is a fairly good reason for all of the indecisiveness of Americans on this subject. The average range of long-term care expenses is from $17,680 through $92,000 annually. The high figure is for a nursing care placement, whereas the lower amount is for day-care assistance. These figures will tend to increase in light of the fact that the future demand for such services is expected to steadily increase.

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