Category Archives: Estate Planning

Texans, protect your assets by sound estate planning

It is a common misconception is that you need to belong in a high tax bracket in order to have an estate plan. According to experts, though, everyone has something of value to leave behind. This is especially true in Texas, where not everyone owns a cattle ranch or comes from an oil-rich family.

Everyone should have a will and a plan for the property and assets they leave behind. You may not have a huge amount of money in the bank, but you do have something. Your home, vehicles, furniture, investments, pension, insurance and Social Security benefits are all part of your estate, and it is never too soon to start planning.

If you become mentally incapacitated or die, consider designating a caretaker of children and your finances.

We want our beneficiaries to enjoy a smooth transition of estate and assets, a stress-free life. Sound planning ensures children and grandchildren will be fairly treated to avoid squabbles later. Think about who you trust to manage your assets if you become disabled or pass away.

A durable power of attorney is a legal provision that can prevent your affairs from being mismanaged. You can include access to bank accounts or stocks for a spouse or child and spell out directions for selling your house.

Estate planners recommend declaring who will be your guardian should you become incapacitated. The person you select must be trustworthy and able to act in your best interests.

You may want to appoint someone for your health care power of attorney. This should be someone you trust to make important decisions for you if you are unable. This designated individual to might need to give advanced directives to physicians and reflect how you view life-sustaining care.

What we leave behind is not always represented by monetary value. We choose our legacy by not putting off decisions about estate planning but by making smart decisions while we live. In Texas, there are competent individuals who dedicate their careers to making sure you go to your final resting place at peace with the decisions you make. Seek help with your estate planning regardless of your perception of its wealth. The choices you make can affect how you will be remembered by your loved ones after you are gone.

Source:Mail Tribune, “Don’t have an estate? It still pays to plan as if you do” Pamela Yip, May. 18, 2014

Estate planning is important for all Texas residents

Did you know the state of Texas puts a will in place upon a resident’s death if there is no other estate documentation on file? The state will may not match your desires when it comes to dividing assets or passing property on to heirs. Estate planning is the best way to ensure your wishes are followed and is important even if you aren’t considered wealthy.

Many people avoid creating wills, trusts or other estate documents because they don’t feel they have a great deal to pass on to others. In reality, everyone has something to pass on, and estate planning can cover items and assets such as tangible personal property, bank accounts, Social Security benefits and pension payments. From family heirlooms to mineral rights, it’s important to draft estate planning documents that clearly define your wishes for disbursement.

Some individuals consider a basic will to be all the estate planning they require. Experts say there are some important questions involved in the estate planning process that may lead you to create more than a simple will. For example, individuals with young children should consider who would take care of kids if one or both parents died suddenly.

Other questions to consider are about your own health and capability. It’s common to consider power of attorney and other options for later in life, but what if you’re involved in a car accident that leaves you unable to care for yourself and your finances? Estate planning ensures a trusted person is in line to handle your affairs.

Some individuals create estate documents to avoid complications and probate. A clear, legally solid document reduces the risk of contests and the expenses associated with disputes or probate court. Understanding the legal needs for each document help you establish the strongest chance your wishes will be followed.

Source:The Dallas Morning News, “Everyone needs an estate plan, regardless of wealth” Pamela Yip, May. 02, 2014

Avoid ‘do it yourself’ estate planning in Texas

El Paso readers, like most, like to save money by doing things themselves. But there are a few things that it might be worth spending money for a professional to handle instead of trying to do it yourself. Estate planning is one of those things.

Drafting estate planning documents is important, and there are too many mistakes that can be made if you are not well-versed in this type of law. Having a professional who knows the difference between wills and living trusts, guardianships and conservatorships, and other complicated estate planning issues can ensure that your will or trusts meet your needs and final wishes. Also, different states may have different laws that could affect how you plan asset distribution.

If you move to a new state, you should have your estate planning documents reviewed to ensure they meet the new state laws and, thus, will still be upheld. Some things that you may want to pay attention to when it comes to different state laws are: asset protection, state taxes on property and assets, and whether your state is a community property state like Texas or an equitable distribution state. These things could have an impact on how you draw up your wills and trusts. Existing documents may need revisions.

You should also know the difference between a will and a living trust, so you can decide which would be best for you. While either a will or a living trust can be used for assigning or transferring property or assets, if you need to assign a guardian to minor children or dependents, you will need to do this through a will. If you are concerned about your assets and want to have them managed while you are still alive, in the event you become disabled for instance, you can use a living trust.

Source:Forbes, “Moving To A New State: How To Put Down Financial Roots” Deborah L. Jacobs, Mar. 19, 2014

Avoiding extra tax burden for non U.S. citizens’ spouses

As the world comes closer together and embraces diversity, it is not uncommon for a citizen of the U.S. to marry a person who is not a citizen here.

The Internal Revenue Service’s term for a person living in the U.S. as a non-citizen is a “resident alien,” which can imply unusual tax implications in marriage. The normal tax guidelines may not apply so there is pertinent information one should know when estate planning so as to avoid hefty tax fines.

While some taxation rules will cover citizens and resident aliens, estate tax is vastly different. If a person dies and leaves a taxable estate of several million dollars, the IRS can claim up to 40 percent of it. One tip to avoid paying large federal estate tax can be to leave your wealth to your children via a trust agreement upon your death. In most cases, the surviving spouse will receive the rest. The IRS is fine with your leaving as much of your remaining tax–free estate to your spouse as long as he or she is a citizen.

This unlimited marital deduction privilege does not apply to a non-citizen spouse.

Possible solutions could be to persuade your spouse to become a citizen, which can be achieved up to nine months after your demise. Another option could be to make large gifts to your spouse over time, which are generally non-taxable.

Finally, a qualified domestic trust can be established in your will. The QDOT money is deferred until your surviving spouse needs to withdraw funds, or he or she passes. This will not eliminate payment, just delay it.

Love has no bounds and interracial marriages are one form of proof. Unfortunately, the IRS is not known for its romantic tendencies, but if you inform yourself in advance about non-citizen spouse estate tax threats, you can potentially lead a long and happy life without worrying about estate planning. Assistance from an experienced estate planner or attorney in Texas will also take away any unexpected or disarming surprises down the road.

Source:Market Watch, “Estate planning with a non-citizen spouse” Bill Bischoff, Feb. 19, 2014

Texas law forces pregnant woman to remain on life support

Although a 33-year-old Texas woman was pronounced brain-dead after collapsing in her kitchen last November, her family has been unable to say good-bye. Not because they are not ready to let her go, however, but because of a state mandate that automatically invalidates a woman’s advance directive when a pregnancy is involved.

The woman, who was found by her husband after she collapsed from a blood clot in her lung, remains on life support in the intensive care unit at John Peter Smith Hospital. Hospital staff continue to monitor the heartbeat of her fetus, which is now in its 20th week of development.

While all 50 states recognize advance directives, some states such as Texas have statutes in place that override a living will if a pregnancy is involved. Since the woman was 14 weeks into her pregnancy at the time of the incident, it is now up to the doctors to determine whether they believe she can still carry her unborn fetus to term.

As her husband and parents continue to prepare for the loss of a loved one, some in the community remain critical of the hospital’s decision to keep the woman on life support. They are quick to point out that since the fetus has not yet reached the point where it is viable outside the womb, under normal circumstance she would still have the constitutional right to have an abortion.

Meanwhile, the family hopes the law will be overturned. They have for the moment, however, chosen to not take any legal action against the hospital, but state that they have also not ruled it out.

Dealing with the loss of a loved one can be difficult under any circumstance. A Texas attorney can make the process easier by helping to establish a living will and health care proxy to fit each individual person’s needs.

Source:Huffington Post Politics, “Here’s Where Your Living Will Can Be Ignored When You’re A Pregnant Woman” Alissa Sheller, Katy Hall, Jan. 08, 2014

State Medicaid keeps tab for elder care

Nothing is free, as they say; and neither is Medicaid, according to one shocked individual who received a bill from the state following the death of her mother. The mother had been getting elder care at her daughter’s home instead of at a nursing home and a year after her mother died, she discovered that Medicaid was charging her over $43,000.

The bill is claiming recuperation of funds from Medicaid since the mother owned a home. This is part of the Medicaid Estate Recovery Program. Clients like this need to be aware that if an individual is receiving Medicaid, they run the risk of losing a home or other assets if the loved one has been getting Texas Medicaid.

In this case, the mother had received Medicaid Long Term Care, so the beneficiary was slapped with a notice of intent to file against the deceased’s estate. The state seeks to receive the monies that the Medicaid program paid for the care of the mother, in spite of the fact that the mother’s care was not at a nursing home. According to the new health care legislation, Medicaid has the right to recover all medical expenses including hospital services, prescription drugs and Medicare expenses covered by Medicare premiums.

The woman’s daughter is required to pay Medicaid back and the state is within its rights to appropriate the mother’s house. Any claims against the estate must be paid before any property can be distributed as specified in a will. While the state does not specify that an heir should sell a house to pay the bill, a lien may be applied or the bill can be paid through other means.

The processing is done via the Texas Medicaid Estate Recovery Contractor, who may state the amount sought will not exceed the estate’s value. If the estate is not worth anything, there would be nothing to recover.

Individuals in similar positions should investigate how to handle elder care in order to protect the estates and property our loved ones have worked a lifetime to achieve. Estate planning tips might include saving money to prepare for such emergencies, obtaining advice regarding Medicaid planning and preparing oneself for long-term elder care., “TONI KING: What is the Medicaid Estate Recovery Program?” Toni King, Dec. 30, 2013

How a living will becomes your voice after you pass

Many people put off thinking about their wills. It reminds us that we are mortals and that someday we will no longer walk the earth. If a person does not designate a spouse or other family member to implement one’s final wishes, then an alternative is a living will.

How to set up a way to honor one’s final wishes should not be the cause of lost sleep. A living will can specify the terms for what happens after a person gets too sick to make cogent decisions. It usually covers the extent of medical care one desires to undergo near the end of life. It can spell out clear wishes for what doctors should do, and for how long they should do it.

Sometimes it is hard to imagine serious illnesses or the decisions that must be made in case you are diagnosed with a terminal or painful disease. Doctors refer to artificial nutrition as the means to whether or not you would want a feeding tube if you are unable to swallow and chew on your own. Fluids and nutrition can be maintained at a life-sustaining levels over the period of time. You may need intravenous feeding or a catheter to help with bodily functions.

Another decision you could put in your living will might be if you want cardiopulmonary resuscitation or advanced cardiac life support if you stop breathing. A mechanical ventilation device can help you breathe if your lungs are not able to do this on their own. This is used for short-and long-term care.

Organ-sustaining treatments, such as kidney dialysis or mechanical ventilation are also part of the instructions you can clarify in a living will. While these treatments do not cure, they may extend the life of a loved one.

These are not easy subjects to discuss. Designing living wills might clear people’s minds and put them at peace that these life-sustaining decisions will be respected during one’s final hours. It also eases the burden of our loved ones who are already grieving for a life lost. Removing the stress of these decisions is the reason most people take on the challenge of determining in advance how they will be cared for in their final hours, as well as at the time of their death.

Source:The Daily Reflector, “Dr. K: A living will speaks for you when you can’t” Dr. Anthony L. Komaroff, Dec. 14, 2013

It’s never too early to start planning for the next phase

Many of us procrastinate when it comes for distribution of our assets. While unpleasant to contemplate our demise, it is often put off until it is too late. Death and or devastating disabilities are not the kinds of situation we look forward to discussing, but a legal advisor can lessen the pain. We know our families frequently turn a deaf ear to these topics, but they need to realize that being thrown into a state of upheaval after a tragic loss is much worse.

There are some painless estate planning tips that one can do immediately that will start the process going in an innocuous way. It is always a good idea to start with a person experienced in such matters of estate planning.

First and foremost, one must create a will. It is staggering to read the statistics of the most wealthy who simply have not made the time to do so. A will can be basic, but there are many options, so be sure to speak to people who know the nuances. A testamentary trust will not take action until after you pass, so do not be afraid to consider unexpected situations that may come up that can use up funds.

A trust is generally built into one’s will. If a person with some wealth passes away and leaves the spouse a considerable amount of money, it is usually in spouse’s name. But if she remarries, and then passes away, her new husband and his heirs can inherit up to one-third of that wealth.

Baby boomers might prefer a revocable living trust for a number of reasons. If you own property in more than one state, this type of trust allows your estate to avoid each unique probate process in various states. Such a trust is portable, as it follows you along state lines.

You will need a power of attorney, as this person can make legal and financial decisions in the event you become incapacitated. This is a big decision so consider it carefully. The power of attorney must be trustworthy and efficient. It can create hard feelings especially among children so try to talk about this in advance to get their input.

All of these decisions can be mind-boggling. For this reason, there are people out there who can help you take this enormous step to ensure your loved-ones are well-taken care of you pass., “5 estate-plan strategies for boomers” Andrea Coombes, Nov. 29, 2013

Creating a secure financial future with estate planning

Although creating a clear estate plan may seem morbid to some people, the alternative can be financially devastating. As many corporations and government plans are relaxing their focus on pension plans, it has become even more important for individuals to plan for a secure financial future. While some individuals may fly by the seat of their pants, many financial advisors recommend taking a more proactive approach.

Previous estate planning goals revolved around avoiding getting slapped with high levels of taxation, but current attempts now include elder law plans. As we face longer life-spans, we need to make sure our retirement funds last. Efforts should include making the most of an IRA, providing for essential needs, long-range health care expenses and ensuring our beneficiaries will inherit the financial considerations we want them to enjoy.

Many experts claim that estate planning might seem to represent a loss of financial control, when the end result is exactly the opposite. A clear plan is a way to make sure our assets are distributed according to our wishes. It also reassures clients that the chances to have to rely on family members later on are less likely. Another advantage is it permits us to identify a list of assets, so we are clear about what we are leaving behind. It is never too early to begin to make a checklist of our assets so we don’t forget about investments, real estate, business endeavors, insurance policies, annuities or retirement funds.

Keeping an updated list allows us to be mindful of liquidity and ownership, along with contact information for our heirs. Regardless of income, all individuals should include power of attorney and proxy for health care in case we become unable to make cogent decisions. We also should name a guardian for our minor children. The checklist we make should be revisited and adjusted regularly, especially after important life events, such as marriage, death or divorce.

In being responsible with our estate planning, our beneficiaries and loved ones will receive their proper inheritance and avoid running the risk of competing with a long-gone ex-spouse. In the long run, following these simple recommendations will benefit present and future generations., “4 Tips to Begin the Estate-Planning Process” Kathryn Buschman Vasel, Nov. 22, 2013

Estate planning and prenuptial agreements: Protecting your assets

Prenuptial agreements may not be romantic but they are more than just protecting one’s assets in a divorce. These agreements are binding contracts that are being used more often these days to protect one’s separate delineation of wealth and assets.

Baby boomers are one demographic that is becoming more concerned about estate planning as they embrace this tool to protect assets and property acquired prior to a marriage. They may also be on their second or third trip to the altar and be concerned about keeping their children’s financial futures secure. A prenuptial can be a key factor in avoiding assets and possessions that could later be seized by virtual strangers in a messy divorce.

In estate planning, a prenuptial agreement should be aligned with final wills and trusts. These can sometimes override a person’s last will and testament or build evidence to contest a deceased person’s final wishes. Common mistakes many people make is to forget to redo a will when entering into a marriage or neglecting to keep their estate planning up-to-date with any new ventures they begin.

Lack of a prenuptial can be a roadblock to a surviving spouse’s right to claim up to one-third of a deceased spouse’s estate. It can affect being a beneficiary or becoming a designated recipient of income from a trust. A prenuptial agreement may impact the transferring of a business endeavor into a managed trust. Efficient estate planning that includes a prenuptial agreement can ensure that the business stays in the family and is not passed to a surviving spouse’s family.

Estate planning considerations can iron out problems before they occur. Who gets the vacation home? Where will my retirement plan benefits end up? Who will take care of my stocks and investments? These are not topics normally considered the best for pillow-talk, but having such preliminary conversations can avoid years of heartbreak and dissent for generations to come. Considering this prior to marriage can make estate planning a much more palatable discussion topic., “Prenups and Estate Planning” Liz Moyer, Nov. 15, 2013