Texas Estate Planning

Does ‘Gray Divorce’ Fit into Estate Planning?

According to the Pew Research Center, the divorce rate has more than doubled for people over 50 since the 1990s. The Pandemic is also adding to the uptick, says AARP’s recent article entitled “Getting Divorced? It’s Time to Update Your Caregiving Plan.”

A divorce can be financially draining. Moreover, later-in-life divorces frequently impact women’s finances more than men’s. That is because in addition to depressed earnings from time spent out of the workforce raising children, women find themselves more financially vulnerable post-divorce and more likely to serve as caregivers again in the future. Even so, for partners of all genders, it is important to consider the longer-term financial outlook, not just the financial situation you’re in when you are actually dissolving the marriage.

You and your spouse will be dividing assets and liabilities and the responsibilities regarding spousal support. How one of you will live if the other gets sick or passes away should also be part of this conversation.

Consider where you’ll need to make changes. One may be removing your spouse from beneficiary designations on all your accounts. (In some states, this is automatic.) Your divorce agreement may also include buying life insurance or maintaining a trust or beneficiary designations for one another.

Create or update your estate plan immediately. You should also ask your estate planning attorney to review your marital agreement. They will have suggestions about how to align your estate plan with your divorce obligations. If you and your ex are co-parenting children, your estate plan should address who their guardians will be, if both biological parents pass away. It is also important to address who will manage any inheritance, if you don’t want your ex-spouse handling assets you may leave to your children.

Create your life care plan, which means naming health care proxies or surrogates (who will take care of your medical affairs, if you’re in need of caregiving), designating a financial power of attorney (who will take care of your finances and legal affairs), and naming a guardian for yourself if you’re incapacitated.

Consider the way in which your divorce will impact your children and extended family if you need caregiving. At a minimum, agree between yourselves what level of contact you can manage and, if you share children and loved ones, know that your lives will cross along the way.

While your marriage may not last, the connections will, so make a wise plan. 

Reference: AARP (Jan. 25, 2022) “Getting Divorced? It’s Time to Update Your Caregiving Plan”

What Should I Know about Powers of Attorney?

Forbes’ recent article entitled “5 Power Of Attorney Clauses You Need to Focus On” explains that there are two types of powers of attorney. A durable power of attorney is valid when you sign it and stays valid, if you later become incapacitated. A springing power of attorney “springs” into effect, if you become incapacitated. No matter the type of power of attorney, here are some things to consider before signing.

1. Designating multiple agents. Selecting the person you want as your attorney-in-fact or agent can be a difficult decision because he or she will have control of your financial assets. You can name more than one person as your agent, but if you name two, specify if they’ll be required to act together or if either one can act independently.
2. Defining gifting parameters. Make certain that your agent will be authorized to make gifts, as this may be important if you want to reduce estate taxes or if you’ll need to apply for government benefits in the future.
3. Changing beneficiary designations. See if the document lets your agent change beneficiary designations. You should have already named beneficiaries of important assets, like life insurance and retirement accounts, but verify whether you want your agent to be able to change those designations. Most people don’t want their agent to be able to change these designations.
4. Amending a trust. If you’ve created a revocable trust during your lifetime, you may want to give your agent the ability to change important provisions of the trust, like the beneficiaries or the amounts that they receive. However, this could ruin your estate planning goals and disinherit family that you intended to provide for. Most people don’t want to give their agent the ability to change a trust.
5. Designating a guardian. The power of attorney often names a guardian, in case one is required. The guardian would be appointed by a court and is often the same person as the agent. If you trust someone enough to be your attorney-in-fact, you’ll probably also trust them as your guardian.

The power of attorney contains powerful authorizations, so make sure you read the document carefully before you sign it. It may be wise to sign a new power of attorney every few years. Otherwise, the power of attorney might become “stale” and your named agent may have trouble using it if it’s ever needed.

Reference: Forbes (July 19, 2021) “5 Power of Attorney Clauses You Need to Focus On”

Why Is Estate Planning So Important?

“Estate planning” will be your family’s guidebook once you have passed away. The Big Easy Magazine’s recent article entitled “Estate Planning Is Essential and Here’s Why” explains that estate planning is similar to writing a last will. HOwever, writing one is not limited to what happens to your house, car, possessions, or other assets after you pass away. It also entails the question of who will take care of your minor children, if they are left without a parent, as well as your instructions for burial and other items.
If you fail to leave specific instructions, the state’s intestacy laws will apply at your death, meaning that the court will decide who gets what. There is no guarantee this will be in your best interest. Let’s look at the consequences of not writing your will:
If you prefer cremation or a traditional burial, your family may not know and decide based on their preferences or convenience.
Your properties will be managed by someone you do not necessarily trust, if you do not name an executor to your will.
Some of your loved ones may not get an inheritance if there is no will. State law may not carry out your intentions, and some people may be left out.
Your favorite charity may not receive donations. For those committed to leaving a legacy, your organization of choice should be listed in the will.
The court will assign guardians for your minor children, and social services will appoint a guardian. You can avoid this, by naming a trusted person in your will.
Aside from avoiding these consequences, estate planning can also save your family a lot of headaches and expense. A detailed will with your instructions will alleviate the stress and provide them with comfort, while they recover emotionally from their loss. Here are the top reasons why you need to plan these things:
You can avoid inheritance taxes and federal estate taxes with proper estate planning.
You can name who will care for you, if you are unable to make your own decisions because of illnesses, infirmity, or old age. With a power of attorney, you can name someone you trust to manage your finances.
If your minor children are orphaned, you can name someone you trust to be their guardian in your will.
Some family members are greedy, so you can exclude them from your will. With an estate plan created by an experienced estate planning attorney, you can ensure that the people you love will receive what you intend.
Estate planning is essential to securing a comfortable life for your loved ones. Work with an experienced estate planning attorney to set things up correctly.
Reference: The Big Easy Magazine (May 17, 2021) “Estate Planning Is Essential and Here’s Why”

It’s Now Harder for Veterans to Qualify for Long-Term Care Benefits

The Department of Veterans Affairs (VA) has finalized new rules that make it more difficult to qualify for long-term care benefits. The rules establish an asset limit, a look-back period, and asset transfer penalties for claimants applying for VA pension benefits that require a showing of financial need. The principal such benefit for those needing long-term care is Aid and Attendance.

The VA offers Aid and Attendance to low-income veterans (or their spouses) who are in nursing homes or who need help at home with everyday tasks like dressing or bathing. Aid and Attendance provides money to those who need assistance.

Currently, to be eligible for Aid and Attendance a veteran (or the veteran's surviving spouse) must meet certain income and asset limits. The asset limits aren't specified, but $80,000 is the amount usually used. However, unlike with the Medicaid program, there historically have been no penalties if an applicant divests him- or herself of assets before applying. That is, before now you could transfer assets over the VA’s limit before applying for benefits and the transfers would not affect eligibility.

Not so anymore. The new regulations set a net worth limit of $123,600, which is the current maximum amount of assets (in 2018) that a Medicaid applicant's spouse is allowed to retain. But in the case of the VA, this number will include both the applicant's assets and income. It will be indexed to inflation in the same way that Social Security increases. An applicant's house (up to a two-acre lot) will not count as an asset even if the applicant is currently living in a nursing home. Applicants will also be able to deduct medical expenses -- now including payments to assisted living facilities, as a result of the new rules -- from their income.

The regulations also establish a three-year look-back provision. Applicants will have to disclose all financial transactions they were involved in for three years before the application. Applicants who transferred assets to put themselves below the net worth limit within three years of applying for benefits will be subject to a penalty period that can last as long as five years. This penalty is a period of time during which the person who transferred assets is not eligible for VA benefits. There are exceptions to the penalty period for fraudulent transfers and for transfers to a trust for a child who is unable to "self-support."

Under the new rules, the VA will determine a penalty period in months by dividing the amount transferred that would have put the applicant over the net worth limit by the maximum annual pension rate (MAPR) for a veteran with one dependent in need of aid and attendance. For example, assume the net worth limit is $123,600 and an applicant has a net worth of $115,000. The applicant transferred $30,000 to a friend during the look-back period. If the applicant had not transferred the $30,000, his net worth would have been $145,000, which exceeds the net worth limit by $21,400. The penalty period will be calculated based on $21,400, the amount the applicant transferred that put his assets over the net worth limit (145,000-123,600).

The new rules go into effect on October 18, 2018. The VA will disregard asset transfers made before that date. Applicants may still have time to get through the process before the rules are in place.

Veterans or their spouses who think they may be affected by the new rules should contact their attorney immediately. To find an attorney near you, click here. 

What Is Status of Larry King’s Handwritten Will?

Larry King's widow Shawn is set to go to court over a recently discovered hand-written will that cuts her out of a share of his fortune.
Fox News reports in the article entitled “Larry King's widow Shawn King plans to contest star's will in court” after King's handwritten will was discovered. The will is said to say that his $2 million estate would be divided among his five children.
The document is said to have been drafted on October 17, 2019—just two months after Larry filed for divorce from Shawn. The new will doesn’t mention her at all and also lists his now-deceased children Chaia and Andy as beneficiaries. This will was written a few months before the loss of 65-year-old Andy and 51-year-old Chaia, who died within weeks of each other.
Larry’s three remaining children -- Larry King, Jr., 59, Cannon, 20, and Chance, 21 -- were also named. Cannon and Chance are King’s children with Shawn. However, Shawn contends that there was already a plan in place between she and King that wasn’t reflected in the alleged document.
"We had a very watertight family estate plan," she told Page Six of a plan she and her husband drew up "as a couple" in 2015.
"It still exists, and it is the legitimate will. Period," she remarked. "And I fully believe it will hold up, and my attorneys are going to be filing a response, probably by the end of the day."
The handwritten will is complicated by the deaths of his children in 2020; in addition, Larry also told Page Six before his death that he and Shawn had once again become close. However, it is not known if the divorce was still moving forward.
Shawn also said that she and her husband spoke daily and claimed she was never made aware of an amendment to his will.
"It beats me!" she said when asked why she thinks Larry drafted the new document.
Their two sons were also "shocked" to hear about the change, she said, and claimed they "are not happy about this."
Shawn also said she thinks someone exerted influence over the broadcast legend to have him write the new will, although offered no additional evidence of this contention.
"Based on the timeline, it just doesn’t make sense," she said, noting that she doesn't believe he would have cut her out due to the filing of divorce papers.
According to People magazine, Larry King allegedly wrote in the document, "This is my Last Will & Testament. It should replace all previous writings. In the event of my death, any day after the above date, I want 100% of my funds to be divided equally among my children Andy, Chaia, Larry Jr., Chance & Cannon."
It looks like under the current will, Shawn would likely get around $300,000 after the $2 million estate was divided among King's sons and presumably the survivors of his late children. However, she says it’s the principle.
Larry King's attorney said that while the firm has no comment on Shawn's position, they feel that "the will, which we will be asking the court to admit to probate on March 25th, reflects Larry’s intent to divide his estate equally among his children."

Federal Court Decides for ‘Blue Water’ Navy Veterans

In November, the U.S. District Court for Northern California ruled in favor of thousands of “blue water” Navy veterans and their survivors, who argued that they’re being wrongly denied benefits as part of a deal reached by Congress last year.
Military Times’ recent article entitled “New court ruling could give thousands of Vietnam vets and survivors overdue disability payouts” reports that under that plan, the Department of Veterans Affairs was required to grant presumptive benefit status for chemical defoliant exposure to veterans who served on ships off the coast of Vietnam during that war.
Advocates for years had said that VA’s requirement of direct proof of exposure was hard to obtain, when it has been decades after veterans were in the service. However, more than 22,500 blue water veterans or survivors have received VA benefits payouts since the beginning of 2020.
The new law didn’t require VA officials to go back and review cases denied before 2020. Vets who reapplied for benefits could have their cases considered again, but advocates argue that all of the cases should be resurfaced and reviewed by the VA.
In an interview with Military Times, Under Secretary for Benefits Paul Lawrence said no decision has been made by VA and Department of Justice officials on an appeal. However, he did remark that the lawsuit was discussed as part of VA’s preparations for the new benefits processing at the start of this year.
If the decision stands — either upon further appeal or if the government opts to simply accept the latest ruling — Lawrence said he’s confident the VA can start reviewing those cases without any significant disruption to operations.
President Trump signed legislation granting presumptive status for disability benefits to about 90,000 Navy veterans who served in the seas around Vietnam during the war. This concludes a long battle to get disability benefits more quickly for up to 90,000 Navy veterans who served in Vietnam.
VA has already paid out about $700 million in retroactive benefits related to the “blue water” veterans benefits in 2020.
Reference: Military Times (Nov. 16, 2020) “New court ruling could give thousands of Vietnam vets and survivors overdue disability payouts”

What are the Estate Planning Basics?

Estate planning is an all-encompassing term that refers to the process of organizing, inventorying and making plans for the proper handling of your affairs after you die, including your dependents as well as your assets, valuables and heirlooms. This typically involves writing a will, setting up a power of attorney and detailing funeral arrangements with the help of an experienced estate planning attorney.
CNET’s article entitled “Estate planning 101: Your guide to wills, trusts and all your end-of-life documents” provides us with some of the key steps in getting started with estate planning.
Create an Inventory. Your estate includes all of the things you own, such as your car and other valuable possessions, plus "intangible assets" like investments and savings. If you own a company, that's also part of your estate. Everything you own should be given a valuation. Have your home and other valuables appraised.
Evaluate your family's needs. A big reason for estate planning is to make certain that your family is cared for, in the case of your death or incapacitation. If you're a breadwinner for your family, the loss of your income could be devastating financially. Consider a life insurance policy to help provide a financial cushion that can be used to cover living expenses, college tuition cost, and mortgage payments. You may also need to designate a guardian, if you have children under the age of 18.
Make job assignments. Dividing up a person’s property can be a tough and emotional task. Make it easier by ensuring that all of your assets have been assigned a beneficiary. You'll also name a few people to coordinate the process of dividing up your belongings. List your beneficiaries, so they know who gets what.
Create a Will. You should have a legally binding document setting everything out in as much detail as possible. A will is a legal document that directs the way in which you want your assets and affairs handled after you die. This includes naming an executor, who is someone to manage how your will is executed and take care of the distribution of your assets.
Help your family if you’re incapacitated. A living will (also known as a medical care or health care directive) states your healthcare preferences, in case you're unable to communicate or make those decisions on your own. If you need life support, a living will states your preferences.
Start estate planning sooner rather than later. Talk to an experienced estate planning attorney today.
Reference: CNET (June 8, 2020) “Estate planning 101: Your guide to wills, trusts and all your end-of-life documents”

Do I Need a DNR in My Estate Plan?

Forbes’s article entitled “Should “Do Not Resuscitate” Be Part Of Your Estate Plan?” explains the difference between a health care proxy and a DNR.
A health care proxy is a legal document that lets you name an agent to make health care decisions for you. It is used if you’re unable to make those decisions for yourself. When you were again able to communicate, you’d go back to making your decisions for yourself. The ability to create a health care proxy is governed by your state’s laws. Every state’s laws are different.
Ask an experienced estate planning attorney how to comply with your state’s law in creating these directives. He or she will know about health care institutions and whether they will give authority to the documents you created. If they won’t, your named agent would have to go to court to enforce them.
You can also supplement your state’s directives with additional guidance.
Some states’ directives require a set series of instructions for your agent. For instance, it may include questions as to whether you want life sustaining treatment and medically administered nutrition and hydration. Other states contain language that is broader. They allow the agent more latitude to decide end-of-life decisions. This language usually includes the intention that you want to be taken off life support, if you have a terminal illness or injury and your death is imminent.
A DNR is a medical order informing health care workers that they are not to revive you. It is a document that you put in place with your physician. Some states have also adopted MOLST forms (Medical Orders for Life Sustaining Treatment) to address other situations, like intubation, ventilation and dialysis. These documents require a thorough discussion between the patient and the health care provider. They are typically part of end of life care, when a person has an advanced stage terminal illness.
If you’re relatively healthy, you want to be treated – and resuscitated – if you have a heart attack. There may be a time when you need a DNR, but most likely it’s not now. If and when that time comes, you’ll need to have a talk with your doctor about a DNR.
However, you should speak with your estate planning attorney about your health care proxy, especially if you don’t have one. Whether it’s during the coronavirus pandemic or not, a health care proxy is a critical part of a complete estate plan.
Reference: Forbes (May 28, 2020) “Should “Do Not Resuscitate” Be Part Of Your Estate Plan?”

What are the Estate Planning Basics?

Estate planning is an all-encompassing term that refers to the process of organizing, inventorying and making plans for the proper handling of your affairs after you die, including your dependents as well as your assets, valuables and heirlooms. This typically involves writing a will, setting up a power of attorney and detailing funeral arrangements with the help of an experienced estate planning attorney.
CNET’s article entitled “Estate planning 101: Your guide to wills, trusts and all your end-of-life documents” provides us with some of the key steps in getting started with estate planning.
Create an Inventory. Your estate includes all of the things you own, such as your car and other valuable possessions, plus "intangible assets" like investments and savings. If you own a company, that's also part of your estate. Everything you own should be given a valuation. Have your home and other valuables appraised.
Evaluate your family's needs. A big reason for estate planning is to make certain that your family is cared for, in the case of your death or incapacitation. If you're a breadwinner for your family, the loss of your income could be devastating financially. Consider a life insurance policy to help provide a financial cushion that can be used to cover living expenses, college tuition cost, and mortgage payments. You may also need to designate a guardian, if you have children under the age of 18.
Make job assignments. Dividing up a person’s property can be a tough and emotional task. Make it easier by ensuring that all of your assets have been assigned a beneficiary. You'll also name a few people to coordinate the process of dividing up your belongings. List your beneficiaries, so they know who gets what.
Create a Will. You should have a legally binding document setting everything out in as much detail as possible. A will is a legal document that directs the way in which you want your assets and affairs handled after you die. This includes naming an executor, who is someone to manage how your will is executed and take care of the distribution of your assets.
Help your family if you’re incapacitated. A living will (also known as a medical care or health care directive) states your healthcare preferences, in case you're unable to communicate or make those decisions on your own. If you need life support, a living will states your preferences.
Start estate planning sooner rather than later. Talk to an experienced estate planning attorney today.
Reference: CNET (June 8, 2020) “Estate planning 101: Your guide to wills, trusts and all your end-of-life documents”

Forbes’s article entitled “Should “Do Not Resuscitate” Be Part Of Your Estate Plan?” explains the difference between a health care proxy and a DNR.
A health care proxy is a legal document that lets you name an agent to make health care decisions for you. It is used if you’re unable to make those decisions for yourself. When you were again able to communicate, you’d go back to making your decisions for yourself. The ability to create a health care proxy is governed by your state’s laws. Every state’s laws are different.
Ask an experienced estate planning attorney how to comply with your state’s law in creating these directives. He or she will know about health care institutions and whether they will give authority to the documents you created. If they won’t, your named agent would have to go to court to enforce them.
You can also supplement your state’s directives with additional guidance.
Some states’ directives require a set series of instructions for your agent. For instance, it may include questions as to whether you want life sustaining treatment and medically administered nutrition and hydration. Other states contain language that is broader. They allow the agent more latitude to decide end-of-life decisions. This language usually includes the intention that you want to be taken off life support, if you have a terminal illness or injury and your death is imminent.
A DNR is a medical order informing health care workers that they are not to revive you. It is a document that you put in place with your physician. Some states have also adopted MOLST forms (Medical Orders for Life Sustaining Treatment) to address other situations, like intubation, ventilation and dialysis. These documents require a thorough discussion between the patient and the health care provider. They are typically part of end of life care, when a person has an advanced stage terminal illness.
If you’re relatively healthy, you want to be treated – and resuscitated – if you have a heart attack. There may be a time when you need a DNR, but most likely it’s not now. If and when that time comes, you’ll need to have a talk with your doctor about a DNR.
However, you should speak with your estate planning attorney about your health care proxy, especially if you don’t have one. Whether it’s during the coronavirus pandemic or not, a health care proxy is a critical part of a complete estate plan.
Reference: Forbes (May 28, 2020) “Should “Do Not Resuscitate” Be Part Of Your Estate Plan?”