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Dallas Estate Planning Law Blog

Life insurance retains a key role in estate planning

Life insurance is a popular tool that is often used in planning a person's estate. This also applies of course to the estate planning regarding a married couple and their children. Traditionally, in Texas and elsewhere, the purchase of life insurance was designed to pay taxes at death.

For a married couple, the estate tax exemption can now be parlayed into an equivalent of over $10 million in exemptions before a federal estate tax must be paid. With federal estate taxes largely off the table for most estates, other estate planning uses have come to the forefront. One obvious use is to pay for the immediate expenses of death, such as burial and funeral expenses, along with administrative fees and state tax assessments.

New rules demand emergency plans for long-term care providers

Texas is a state that has its share of natural and man-made disasters. The federal Centers for Medicare & Medicaid Services (CMS) are concerned that residents of health care facilities will be well protected and cared for during a future emergency. The owners of long\-term care facilities must comply with new rules being formulated by the CMS to assure that facilities are prepared to take care of patients during disasters and emergencies.

The CMS stresses that compliance is vital because it is important to have one comprehensive approach for emergencies shared by all institutions. The CMS also indicated that the institution's first priority in an emergency is to care for the patients. It also indicated that the current rules were closely studied and found to be inadequate to fully respond to the varieties of emergencies that can arise.

Long-term care may be worst financial problem in post-retirement

After retirement, the average person has about a 50 percent chance of needing to be cared for in a nursing or similar institution. The chances are that for many the cost of such long\-term care services will be out of reach. For an average 2.5 years stay in a Texas institution, the cost is estimated to be in the range of $200,000. When it comes to being prepared for such an event, most people procrastinate, and if they do think about it, they create an unreasonable expectation that someone or some agency will come along and pay for it.

The fact is, however, that Medicare does not cover long-term extended care. The only governmental program for this need is Medicaid. To qualify for Medicaid, some very special planning will be required. Medicaid is designed to take over when the individual has basically no remaining assets to pay for the care. Fortunately, Medicaid lets you keep a home, personal belongings, a car and a small amount of savings.

Estate planning requires regular review to keep the plan current

In Texas, the preservation of one assets, preparing plans for how those assets may satisfy certain needs in one's elder years, and also having a plan for the distribution of assets to family and best friends are all major considerations to keep one's affairs in top-notch condition. It is also highly recommended by estate planning experts that everyone review and update their estate plans every five years. Estate planning attorneys are ready to assist clients in keeping their documents and planning tools up-to-date.

The bottom line is that every kind of change in one's life that can be imagined may in some way or another necessitate change in one's estate planning documents and accounts. The most obvious to remember are divorces, marriage, having children or grandchildren, and going through having loved ones and friends die. If any of that has happened, a person must take steps to review the pertinent documents and make changes that are appropriate.

Long-term care laws may often be used to save family home

It's a common scenario in Texas and elsewhere: an elderly couple enjoying retirement face a crisis when one of them gets ill and incapacitated and needs to enter a nursing home or similar facility right away. The spouse at home is in relatively good health and is still active but there is no long\-term care plan that has been put in place to contend with the crisis. Does he or she have to sell the house to finance the rather exorbitant institutional charges that are demanded?

In many instances, an elder law attorney may be able to save the home by taking advantage of certain available legal remedies. If an expert legal professional is not consulted, the most common development is that the couple sells the home to finance the nursing home stay. When that happens, they also learn to quickly dissipate the house proceeds so that they will qualify for Medicaid, which is the federal agency that will pay for institutional stays of people who have no assets.

Careful estate planning now may prevent problems later

Many people in Texas and throughout the United States avoid conversations that have to do aging and mortality. While one needn't spend an exorbitant amount of time focusing on these topics, both are part of the natural progression of life and are often part of discussions regarding estate planning. Data suggests that executing a plan while one is still younger in age and of sound mind often helps prevent confusion and dissension among family members later.

If there is a particular person or persons whom you would like to give a specific inheritance, it is best to list them by name ahead of time. Should you die with no estate plan in place, there is no guarantee that the state will distribute your assets to the same person/persons you yourself would have chosen. In addition to asset distribution, a thorough estate plan allows you to name someone as a voice of authority to make decisions on your behalf should you become unable to do so due to incapacitation.

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.

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Bedford (Fort Worth), TX 76021
Phone: 817-545-3425
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Austin, TX 78734
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Addison, TX 75001
Phone: 972-685-5202
Fax: 972-685-5206
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