Texas Estate Planning

My Parents Named Me as their DPoA--Now What?

If you’re reading this, it’s probably because someone you know and trust has named you as their “Durable Power of Attorney” (DPoA), which simply means you can act as their agent in financial matters while they also maintain access to their financial accounts. 

But, having a notarized document stating you have this power is really only the beginning. What good is a legal document if the principal’s (the person who named you as their power of attorney) financial institutions don’t know you have this power? 

 

DPoA Basics: 

According to the Texas State Law Library (Texas.gov), “A durable power of attorney is generally used to make plans for the care of your finances, property, and investments in the event that you can no longer handle your financial affairs yourself.” This document does not remove you from accessing your assets, but simply allows someone that you know and trust to make transfers, create and fund trusts, sign checks, and other financial tasks that can be helpful to ensuring everything is in order for your estate plan. 

As of the time this article was written, Ard Law Firm, PLLC, has found these documents to be quite helpful to our clients, especially in the Medicaid application process. In order to get you qualified and help you pay for a nursing home, we must submit financial documents that can be easier to obtain with the help of your Durable Power of Attorney.

You have a Durable Power of Attorney–now what? (process) 

Each bank and financial institution has their own process in accepting Durable Power of Attorney documents. And beware–they often try to get you to sign their own Power of Attorney forms which typically negate any prior documentation and might be only valid for that specific bank. While the bank’s form might get you access to the one account you need at that precise moment in time, it unravels everything else in personally crafted DPoA documents that our Firm might provide to you, meaning you won’t be able to access any of the principal’s other accounts. 

One reason financial institutions do this is because they don’t want to be held liable in the event that the DPoA document they receive is fake. Their caution is understandable, but we just want to prepare you for what the process might look like when enacting your Durable Power of Attorney:  

Recently, one of our team members went through the process of filing a DPoA with their father’s bank as their father’s agent. The steps they went through at their local bank are listed below: 

1. Drop off DPoA document for the bank's legal department to review. 
2. Wait 7-10 business days for the legal department to approve the DPoA document. 
3. Schedule an appointment at the bank to get onto his father’s accounts as DPoA.
4. Bring 2 forms of ID for the agent (DPoA) and the principal (person granting this power) to the appointment. 
5. Fill out a separate, additional affidavit of Power of Attorney at the bank. 
6. Sign a new signature card as both the agent and the agent of the principal. 

Our team member said the bank required all of this to be done with a banker not at the window and it took a few hours to complete. It may sound like a lot, but the inability to access your loved ones' assets could be far more time consuming than a handful of trips to the bank. 

What's the Difference Between Medicaid, Medicare, SSI, and SSDI?

If you need assistance paying for long-term care, then you need to look into Medicaid, not Medicare. But if you need health insurance, then it’s a Medicare application you’ll be submitting. And although SSI (Supplemental Security Income) refers to a specific type of program, it’s only a one letter difference from SSDI (Social Security Disability Insurance) which is a completely different benefit program for people with various types of disabilities. 

And when you look into the details of each program, it only gets more complex. So let’s break it down…

There are over one-hundred programs administered under the umbrella of Medicaid out there to help you receive the appropriate health care, insurance, and assistance that you deserve. Because of the sheer number of programs, it can be difficult to find the one best-suited for your needs. Each program has different requirements, guidelines, and limitations. 

Each program is guided by laws that change each year, if not more often, and vary from state to state, depending on the program. It can be quite helpful to get counsel from a licensed attorney in your area who stays up to date on the laws that specifically deal with the program you are applying to. The Attorneys at our Firm stay up to date through consistent continued learning experiences offered specifically for this purpose, and they ensure that every member of the team is made aware of updates and changes in the law so that we can better serve the needs of our community. 

To help you in your search for the program that best fits you and your family’s needs, here is a very quick rundown of 4 common programs that are easy to confuse: 

 

1. Medicaid: 
   • Health coverage (which is legal entitlement to payment or reimbursement for your health care costs)
   • Funded and administered jointly by the state and federal governments. This means that each state has different laws regarding Medicaid.
   • Income and asset limit 
   • Available to low-income: 
     1. Adults
     2. Children
     3. Pregnant women
     4. Elderly adults 
     5. People with disabilities 
   • Can be used for: 
     1. Long-term care 
     2. Inpatient and outpatient hospital services
     3. Physician services
     4. Lab and x-ray services
     5. Home health services 
2. Medicare: 
   • Health insurance 
   • Administered by the federal government 
   • Eligibility is based on: 
     1. Age (65 or older) 
     2. Certain younger people with disabilities 
     3. People with End-Stage Renal Disease 
   • There are various Medicare plans based on your eligibility and needs. 
3. SSI (Supplemental Security Income): 
   • Supplemental monthly income 
   • Eligibility is based on:
     1.  income and asset limits 
     2. disability
     3. Age 
        • Adults: 65+, or blind, or have a disability 
        • Children: under 18 and have physical or mental condition(s) that very seriously limits their daily activities for a period of 12 months
4. SSDI (Social Security Disability Insurance): 
   1. Supplemental monthly income 
   2. Means-tested based on disability and recent work history 
      1. Includes income and asset limits 
   3. Same medical requirements as SSI 

 

Hopefully that helps give you a better picture of where to start in your search for the programs that you or your loved ones might need. Remember that each state has their own set of laws regarding benefit programs and a licensed attorney with an understanding of these programs can be a helpful resource in navigating the application process. 

Ard Law Firm, PLLC is located in the Greater Houston Area, off I-45 south on the way to Galveston, but is able to serve all of Texas. Over the last decade, we’ve focused on Medicaid to help people transition into long-term care without large financial burdens.

We work with our clients to get their information together in order to apply for the benefits they deserve, and if obstacles come up along the way we work together to overcome them. Whether that means drafting legal documents, conducting research, or even arguing appeals, we walk with you on your journey, every step of the way.

What Does Autism Awareness Month Have to Do With Inheritance?

April is Autism Awareness Month (also called Autism Acceptance Month) and we want to make sure that you’re aware of what can happen if you neglect to consider your autistic or disabled descendants and heirs when creating your estate plan. You might have heard of a Supplemental Needs Trust (SNT). Formerly called “Special Needs Trust,” SNT’s are helpful tools in the Estate Planning process if you have a loved one currently receiving (or in the future could receive) means-tested government benefits like SSDI. 

Many folks are familiar with Autism Awareness Month, but in recent years, the autistic community has urged for people to focus on “acceptance,” more than just simply “awareness.” It is important that we accept the needs and perspectives of autistic people especially in regards to the issues that directly affect them and their experience of the world. 

Not every person with autism or other disabilities will qualify for SSDI. And similarly, not every able bodied person will remain that way throughout the entirety of their lives. Our needs and capabilities can change for many different reasons, most of which are difficult to predict, but if you have anyone in your life with a family history of chronic medical conditions (physical, developmental, or mental) you might want to look into setting up a Supplemental Needs Trust as part of a comprehensive estate plan that addresses all of the likeliest outcomes, and then some.

 

Here’s how an SNT works: 

If someone is receiving means-tested benefits, such as Social Security Disability Insurance (SSDI), their income must remain under a certain limit set by the government in order to qualify for those benefits. This income is checked every month and even one month in which a person receives a large sum of money (like an inheritance after someone passes away) could kick them off of their benefits program, forcing them to re-apply next month. The application process for SSDI is generally lengthy, difficult, and something that folks don’t want to go through multiple times. 

Even an inheritance of $1,000 could be enough to put your loved one over the SSDI income limit. Since a trust keeps assets outside of someone’s ownership, your loved one receiving benefits can access those funds in very limited, but incredibly helpful ways. The laws surrounding SNTs are very exacting and specific; unless you take time to work with an attorney experienced in this field, your efforts may end up putting your loved one in jeopardy of losing their benefits.

Trusts are legal documents dictating how, when, and where you’d like your assets to be distributed and/or used. A Supplemental Needs Trust can be set up at any time and can be designed to only go into effect under the specific circumstances you name in the trust. To make sure your trust documents work in your intended way, please seek the counsel of a licensed attorney in your area with experience in Supplemental/Special Needs Trusts. Supplemental Needs Trusts are often drafted alongside Wills, and other estate planning documents, to make sure they are designed to work together.

 

Types of SNTs 

There are two main types of SNTs. First Party SNTs are established with money that originally belonged to the person receiving benefits, while Third Party SNTs are established with money from someone else, often parents or siblings.

Both types of SNT are limited in the kind of expenses that they are allowed to pay for, but First Party SNTs have an extra limitation that Third Party SNTs do not. First Party SNTs are required to include a clause that causes the assets in a First Party SNT to go to the state where the beneficiary is living, and the State will use those funds to add to their benefits program. Third Party SNTs can name a beneficiary to receive the assets held by the trust after the first beneficiary passes away.

Although SNTs have limitations placed on them regarding what the assets inside the Trust can be used to pay for,  they can improve the services and equipment accessible to your loved ones. Ask about state-specific ABLE accounts too, these are new tools that are designed to be used with SNTs to increase your loved ones quality of life across the board!  

It is important to correctly identify the type of SNT that fits your situation, otherwise you run the risk of having the SNT invalidated, which could cause many other problems down the line. Meet with an experienced attorney in your area. 

 

April is Autism Awareness Month

Autism Acceptance/Awareness Month, also celebrated as “World Autism Awareness Day” (April 2) is observed worldwide as a time to learn more about Autism Spectrum Disorder (ASD) and ways in which you can support autistic people. According to an article on Healthline, “Autism is considered a disability from a medical and legal standpoint. But according to mental health professionals, not everyone with autism identifies as being disabled.” 

Just like with any other disability, the autistic community is not a monolith. Each person receiving SSDI has their own specific needs, goals, interests, and desires. It is important to consult your disabled loved one and/or the caregiver(s) most knowledgeable about their daily care needs before making the financial decision to set up a Supplemental Needs Trust for them. 

In most cases, it is harmless to create an SNT for someone who might not end up receiving means-tested government benefits, but it is even better to respect the autonomy of the disabled people in your life and discuss the pros and cons of setting up a Supplemental Needs Trust for them to use if/when the time comes. 

By placing money and assets into a trust, you protect yourself, your trustees, beneficiaries, and your assets themselves. It is better to have a plan and not need it than to need a plan but not have one.

What is National Healthcare Decisions Day?

“Healthcare decisions,” might sound like some far-off bridge you’ll cross when you get to it, but the reality is that our health is unpredictable. We really don’t know when healthcare decisions will need to be made or if someone else will need to be making them for us. 

Over the last few years, people are seeing the importance of getting a plan in place that will protect them, their family, and their assets. Scenarios in which we’re unable to make our own healthcare decisions are not easy to think about, but they are important to discuss with people that you know and trust, the people that will most likely have to make those difficult healthcare decisions on your behalf. 

National Healthcare Decision Day (NHDD) was founded in 2008 by Virginia-based health care lawyer, Nathan Kottkamp, because he saw the pitfalls in our healthcare system that occur when people fail to discuss their healthcare wishes or have a plan in place. He chose April 16th to remind us that even though it’s tax season, there are some other human experiences we can be certain to face. 

But National Healthcare Decision Day goes far beyond our “last wishes.” It is about making sure someone knows what we value so that they can confidently make decisions for us if the need ever arises. It can be daunting to think about someone else having the final say in our health care, but imagine being the one making those decisions and not having the slightest clue of what the person in the hospital needs or wants. 

 

Give your loved ones the confidence that they’re making the right decision.
Not only is it important to communicate your wishes to your friends and family, it is often necessary to outline them in a legally binding document (or two). An Advance Directive, often referred to as a “Machines or No Machines Document,” is a legal document in which you explicitly state what type of medical care you’d like under certain circumstances. 

But it’s impossible to predict exactly what your circumstances are going to be, so take April 16, National Healthcare Decisions Day, to have these conversations with the folks who need to know. Check out The Conversation Project’s “Conversation-Starter” guides on their website. The Conversation Project recommends discussing what you value in your life in order to better understand what to prioritize in the event that you become incapacitated. These broader conversations help prepare your loved ones for unpredictable medical events, as opposed to only discussing very specific circumstances that might not ever occur. 

Another legally binding document that can be helpful in ensuring you receive the care you desire is called a “Medical Power of Attorney.” If you don’t have this document in place, then your state will defer to their laws which dictate who will make your medical decisions in the event that you become incapacitated. For instance, if you’re married, more often than not, your spouse will be the one to speak on your behalf. Getting a Medical Power of Attorney not only allows you to name whomever you wish to speak on your behalf, but also allows you to name alternates in the event that your initial agent is not able to act at the time or in the place you might need them to. 

 

Celebrate National Healthcare Decisions Day– start the conversation with your loved ones.
For healthcare decisions, it can be very beneficial to have your wishes in legally enforceable documents because doctors often prefer to take every measure possible in order to keep you alive. And while this is a noble stance for doctors to take, there are certain circumstances in which this approach may be distressing for you and your loved ones. 

Celebrating National Healthcare Decision Day with honest conversations about your values can bring peace of mind to you and your loved ones. It might be difficult to begin such a conversation, but it pales in comparison to the difficulty of making healthcare decisions for someone else without any directions.