Texas Estate Planning

Some Key Documents Should Be Considered Before Sending Your Child Off to College

In the United States, as soon as a minor turns 18, they’re typically considered a legal adult.

As a result, parents no longer have any authority to make decisions for their child, including financial and health care decisions.

Yahoo’s recent article entitled “Don’t Let Your Child Leave for College Without Signing Three Critical Documents” asks what if your adult child becomes sick or is in an accident and ends up hospitalized?

Because of privacy laws, known as Health Insurance Portability and Accountability Act (HIPAA), you wouldn’t have any rights to get any information from the hospital regarding your child's condition. Yes, we know you’re her mother. However, that’s the law!

You also wouldn’t have the ability to access his or her medical records or intercede on your child's behalf regarding medical treatment and care.

If your child’s unable to communicate with doctors, you’d also have to ask a judge to appoint you as your child’s guardian before being able to be told of his or her condition and to make any healthcare decisions for them.

While this is hard when your child is still living at home, it’s a huge headache if your child is attending college away from home.

However, there’s a relatively easy fix to address this issue:

Ask an experienced estate planning attorney about drafting three legal documents for your child to sign:

• A Durable Power of Attorney (DPOA) for Health Care. This document designates the parent as your child's patient advocate.
• A HIPAA Authorization gives you access to your child’s medical records and lets you to discuss his or her health condition with doctors.
• A DPOA for Financial Matters, designates the parent as your child's agent, so that you can manage your child's financial affairs, including things like banking and bill paying, in case your child becomes sick or injured, or is unable to act for any reason.

Reference:  Yahoo (Aug. 2, 2022) “Don’t Let Your Child Leave for College Without Signing Three Critical Documents”

Estate Planning Tools and the Ones You Must Have

When hip-hop star DMX died in 2021, he had no will and only a few liquid assets. His estimated 15 children are expecting a share of his estate, but the estate has been in the probate court for months. An estate also has to be established to manage any expected future earnings from his music. However, with no appointed administrators and legal costs, DMX’s estate will be dwindling until the proceedings are finalized.

In fact, some reports estimate that DMX's net worth was estimated to be $10 million. However, it fell to a perhaps even negative $1 million at the time of his death.

Finurah’s recent article entitled “Not Just for the Rich: Five Estate Planning Tools Everyone Needs” reports that the number of Black Americans who have completed a will has increased by 6.2% (from 25.9% to 27.5%).

Estate planning lets you stay in control of your assets, while contributing to your family’s generational wealth. Let’s look at five tools necessary to create a comprehensive estate plan.

1. Will. A will establishes the distribution of your individual assets. A will is also important if you have minor children because it is the only way you can nominate a guardian of your choosing for them.
2. Trust. A trust is a fiduciary arrangement that lets a third party (the trustee) hold assets on behalf of a beneficiary or beneficiaries. Trusts can be arranged in many ways and can specify exactly how and when the assets pass to the beneficiaries.
3. Power of Attorney. This lets you appoint a trusted person to act on your behalf as your agent or attorney-in-fact. He or she will handle financial decisions on your behalf, such as real estate transactions, banking transactions, insurance and Medicare.
4. Health Care Proxy. This document allows someone you have appointed to make medical decisions in the event that you cannot.
5. Living Will. If you have a terminal illness or death is imminent, this document identifies the treatments or medications you would want administered, withheld, or withdrawn, allowing you to remain in control of your end of life. In short, this lets people know what you want and do not want.

Talk to an experienced estate planning attorney about a comprehensive estate plan that includes these five documents.

Reference: Finurah (Feb. 5, 2022) “Not Just for the Rich: Five Estate Planning Tools Everyone Needs”

What Should I Know about Conservatorships?

Control over another person's life and money has been in the news recently and not in a good way. Conservatorships made a lot of headlines a few months ago, when singer Britney Spears contested her father's 13-year control of her finances. Kiplinger’s recent article entitled “What to Do When a Family Member Needs a Guardian” says that even Netflix portrays these legal arrangements as little more than an invitation for fraud in its 2021 movie, "I Care a Lot," which starred Rosamund Pike as a professional guardian who cheats her clients out of their life savings.

While the rules vary by state, generally when someone (a petitioner) files a petition with the court to seek guardianship of an adult, a judge holds a hearing to determine whether that person meets the state's standard for needing a guardian. A person requiring guardianship can lose important rights, including the ability to marry, travel, make certain medical decisions, possess firearms or even vote.  That is why courts may be reluctant to permit an all-encompassing loss of rights. It is common for a court to limit a guardian's authority, so that it only addresses a specific area with which the person needs help—like managing bills and maintaining a home. The least intrusive option is generally preferable.

An examination by a physician is usually required to determine if the individual suffers from a medical condition that impairs judgment. However, sometimes the need for a guardian is clear -- for instance, a person who has suffered a stroke and is in a coma. Dementia is the most common reason why an adult might be declared incapacitated. Note that depression can be mistaken for dementia. Delirium, which can cause a person to be confused and unaware of their environment, is another common cause.

When a guardian is needed, courts typically appoint a family member. However, sometimes there is no one appropriate, so the court may appoint a public guardian paid by the state or occasionally a professional guardian paid with private funds.

Note that the guardian's job is to protect your loved one, not serve the family’s interests. As a result, family dynamics can be stressful because relatives believe the guardian is spending their inheritance.

A guardian must keep clear records as to how any money is spent and discuss any reimbursement for expenses, such as the time and mileage for transporting the ward to appointments, in advance.

Being a guardian should be seen as a professional job. Depending on the situation and how complicated it is, it can be a great deal of work.

Reference: Kiplinger (Jan. 25, 2022) “What to Do When a Family Member Needs a Guardian”

Do I Really Need a Will?

The truth is that drafting your will can be an uncomfortable experience. That’s because nobody wants to consider their own mortality.

However, you need to move past that discomfort and put that key document into place.

No matter if you're wealthy or have little to no assets, a will is an important document to have.

MSN’s recent article entitled “4 Reasons to Get a Will if You Don't Have One Already” says that a big myth is that there's no reason to have a will, if you hardly have any money.

However, wills are not just for the wealthy. No matter your situation, there are four reasons why it is important to have one.

1. Control what happens to your assets. You may only have a couple of thousand dollars in the bank and limited assets of value, like a PC and an older car that is about ready to pass away. However, wouldn't you like to be the one who says where those assets will go upon your passing? Without a will, you will not necessarily get to do that. However, if you draft a will, you can detail the way you want your assets divided, including the computer and your clunker.
2. Be sure someone you know, and trust will care for your children. If you have minor children, it is very important that you draft a will. Without a legal will, you will not have a clear plan for their care in the event of your death. To that end, you should talk to trusted family members and friends about who might be willing to step up and raise your children, if needed.
3. Create a contingency plan for your pets. Your pets rely on you to provide food, shelter and care, and there is no way you’d willingly dump them out on the street. Avoid a situation where your pets end up neglected when you pass away. Have some discussions to see who in your life would be willing to take in your pets, should the need arise.
4. Peace of mind. While the actual process of drafting might stir up some unsettling feelings, once it is done, you might breathe a sigh of relief because you'll have completed an unpleasant task. You will also have your final wishes mapped out clearly and legally.

What Can’t I Forget in My Will Now that I’m 50?

Yahoo News’ recent article entitled “If You're Over 50, Don't Leave This Out of Your Will, Expert Says” fills us in on what we can’t forget in a will after the big 5-0.

Incapacity. A 2021 survey from Caring.com says that almost two-thirds of adults do not have a will. Even those thinking about estate planning do not consider a plan for addressing the possibility of incapacity.

Ask an experienced estate planning attorney to create a power of attorney, so in the event you are incapable of making decisions because of your mental state or disability, you have someone you trust doing it for you.

More than a will. A will should be one component of a comprehensive estate plan that addresses who gets what when you die, but also who can take care of business, if you are not able to care for yourself. Naming a person in advance lets you to avoid having court involvement and lets you take control of your future.

The law has many ways for you to select who will have authority and care for you, if you become incapacitated. This is something that you can and should discuss with an experienced estate planning attorney.

Will backups. Designating loved ones you trust should be the rule in all facets of estate planning. However, it is critical to be certain that you have backups (“successors” or “alternates”), in the event that a person you’ve selected can't fulfill their role.

Many people around age 50 who see their thriving, productive children making their way in the world fail to consider the thought that their children may not be available or able to serve a role. Designating more than one backup might not seem like it is a big deal, but you should consider the possibility that a loved one might be incapacitated, predecease you, or be unavailable.

Keep your will current. As your life changes, so do your needs. Therefore, it is vital to be sure that your will is up-to-date. You should review your will regularly (at least every few years) to make sure that it still reflects your current thinking.

You should also be sure you know where an original copy of the will is located. It is important to keep track of it. You can leave it locked away with your attorney or some other secure place, but you need to know where it is.

Reference: Yahoo News (Feb. 6, 2022) “If You're Over 50, Don't Leave This Out of Your Will, Expert Says”

What Should Same-Sex Couples Know about Estate Planning?

Proper estate planning can help ensure that your wishes are carried out exactly as intended in the event of a death or a serious illness, says Insurance Net News’ recent article entitled “What Same-Sex Partners Need to Know About Estate Planning.” Having a clearly stated plan in place can give clear instructions and potentially avoid any fights that otherwise might occur. For same-sex couples, this may be even more crucial.

Your estate plan should include a will or trust, beneficiary forms, powers of attorney, a living will and a letter of intent. It’s also smart to include a secure document with a list of your accounts, debts, assets and contact info for any key people involved in those accounts. This list should contain passwords for locked accounts and any other relevant information.

A will is a central component of an estate plan which ensures that your wishes are followed after you pass away. This alleviates your family from the responsibility of determining how to divide your property and takes the guessing and stress out of how to pass along belongings. A will or trust might also state the way in which to transfer your financial assets to your children. You should also make sure your beneficiary forms are up to date with your spouse for life insurance policies, bank accounts and retirement accounts.

For same-sex couples, it is particularly important to create a clear medical power of attorney and create a living will that states your medical directives, if you aren’t able to make those decisions on your own. If you aren’t married, this will give your partner the legal protection he or she needs to make those decisions. It is important for you to take time to have those conversations with your partner, so the plans and directives are clear. You can also draft a letter of intent, which is a written, personal note that can be included to help detail your wishes and provide reasoning for the decisions.

Protecting Your Minor Children. Name a legal guardian for them in your will, in the event both parents die. Same-sex couples must make sure that both parents have equal rights, especially in a case where one parent is the biological parent. If the surviving spouse or partner isn’t the biological parent and hasn’t legally adopted the children, don’t assume they’ll automatically be named guardian.  These laws vary from state to state.

Dissolve Old Unions. There could be challenges, if you entered into a civil union or domestic partnership before your marriage was legalized. Prior to the 2015 marriage equality ruling, some same-sex couples married in states where it was legal but resided in states where the marriage wasn’t recognized. If you and your partner broke up, but didn’t legally dissolve the union, it may still be legally binding. Moreover, some states converted civil unions and domestic partnerships to legal marriages, so you and a former partner could be legally married without knowing it. If a former union wasn’t with your current partner, make certain that you legally unbind yourself to avoid any future disputes on your estate.

Review Your Real Estate Documents. Check your real estate documents to confirm that both partners are listed and have equal rights to home ownership, especially if the home was purchased prior to the legalization of same-sex marriage or if you aren’t married. There are a few ways to split ownership of their property. This includes tenants in common, where both partners share ownership of the property, but allows each individual to leave their shares to another person in their will. There’s also joint tenants with rights to survivorship. This is when both partners are property owners but if one dies, the remaining partner retains sole ownership.

Estate planning can be a complex process, and same-sex couples may have more stress to make certain that they have a legally binding plan. Talk to an experienced estate planning attorney about the estate planning process to put a solid plan to help provide peace of mind knowing your family is protected.

Reference: Insurance Net News (June 30, 2021) “What Same-Sex Partners Need to Know About Estate Planning”

Why Is Walt Disney’s Grandson Unable to Claim his $200 Million Inheritance?

Los Angeles County Superior Court Judge David J. Cowan recently claimed that Walt Disney’s grandson Bradford D. Lund had Down Syndrome—despite being presented with DNA evidence proving the opposite. The judge also ruled Lund to be “unfit” to receive his $200 million inheritance from Walt Disney and appointed him a temporary guardian to make all his legal decisions. This was all ordered without a hearing. Lund’s legal team is now trying to contest the rulings.

Inside the Magic’srecent article entitled “Walt Disney’s Grandson Sues Judge Claiming He Has Down Syndrome Without Evidence, Blocking $200 Million Inheritance”says that in the complaint, Lund’s attorney Lanny Davis alleges that the probate court’s action is “all too reminiscent of a perspective where facts do not matter but alternative facts do, where the constitution does not matter…”

The alternative facts Davis spoke of are from a 2016 court decision by Superior Court Judge Robert Oberbillig from a 10-day trial brought on by “disgruntled relatives” against Lund. The trial came after seven years of litigation questioning whether Lund was required to have a limited guardianship. In that trial, Lund was examined by two court-appointed physicians, one court-appointed expert and by Judge Oberbillig himself in open court.

From the investigation, Judge Oberbillig rejected the family’s claims that Lund needed guardianship and ruled that Lund was “not incapacitated.” However, Judge Cowan ignored Oberbillig’s ruling and the DNA evidence that showed Lund doesn’t have Down Syndrome. Instead, Cowan stated from the bench: “Do I want to give 200 million dollars, effectively, to someone who may suffer, on some level, from Down syndrome? The answer is no.”

From this statement, Lund’s legal team brought an additional cause of action that claims Judge Cowan and the Los Angeles Court violated an anti-discrimination law, when Judge Cowan made this “indisputably false” statement and “perception.” They claim this resulted in discrimination against Lund and his loss of freedom regarding the right to counsel and property rights without due process of law.

On Feb. 27, 2020, Lund’s counsel also filed a federal civil rights case in the U.S. District Court for the Central District of California against Judge Cowan for alleged violation of Lund's constitutional due process rights in the appointment of a limited guardian ad lit em.

Lund was supposed to have received his portion of his mother’s trust fund when he was 35, which was 15 years ago. He is now 50 years old.

Reference:  Inside the Magic(March 25, 2020) “Walt Disney’s Grandson Sues Judge Claiming He Has Down Syndrome Without Evidence, Blocking $200 Million Inheritance”

Special Needs Guardianship Can Be a Challenge

A person who’s diagnosed with autism should have a named guardian before turning 18. At that point, the person can sign binding contracts, make health care decisions and sign IEPs (Individualized Education Plan) without parental involvement. 

Autism Parenting’s recent article entitled “A Brief Overview of Special Needs Guardianship” explains that guardianship is a legal process in which a responsible person is named as the final decision maker for another. When it’s the parent and their child with autism, the parent can become the guardian of the 18-year-old with autism in a specific legal process. Guardianship gives the parent the final say, on all decisions regarding the child. 

It’s not uncommon for a parent to be hesitant about becoming the guardian, especially if the child is developing well and has several abilities. One question to ask in this situation concerns the intellectual or developmental age of my child. If the honest answer is below the age 18 (like 14 or 12 years old), then you’ll want to ask yourself if you’d allow your 14-year-old make all healthcare, education, housing and financial decisions and have those decisions be legally binding. Probably not. In that case, you should look into guardianship. 

If your adult child continues to develop and at some point down the road can make decisions on her own, the guardian can petition the court to have relationship revoked. 

Another important time period that guardianship needs to be considered is when the parents die. The appointed guardian then will be responsible for day-to-day care or decisions on that day to day care. The selection of a guardian for this situation is often a large roadblock to finishing up a family’s plan. 

The reason is because parents must make this decision before completing their will. If parents have trouble with choosing a potential guardian, consider these criteria when considering each person: location, family circumstances, their personality qualities and demeanor, their age, their experience with special needs individuals, the fact that the person knows your family member, your parent or your loved one knows the individual, their financial position, marital status and work schedule. 

By the following factors, parents can rank each possible future guardian and settle on the best possible choice. 

Although the guardian might never be as committed as a parent, if you use a more objective process (like the criteria above), parents will be better able to find a qualified future guardian. 

Reference: Autism Parenting (undated) “A Brief Overview of Special Needs Guardianship” 

Florida Addressing Elder Abuse in Troubled Guardianship Program

Legislators and officials from Governor DeSantis’ administration met with judges, guardian trade groups, state attorneys and representatives from the Elder Law section of the Florida Bar to discuss how to protect seniors from exploitive and neglectful guardians, as reported in the article “DeSantis, Florida lawmakers consider changes in troubled guardianship program” from the Orlando Sentinel.

The Department of Elder Affairs Secretary Richard Prudom said that more must be done to enhance the accountability of guardians and be sure they are acting in the best interest of their wards. He added that the matter extends beyond the Department of Elder Affairs, and that families, communities and public officials need to work together.

This past summer reports surfaced about a professional guardian who was responsible for more than 400 wards. She reportedly signed “Do Not Resuscitate” orders for clients against their wishes. She also double-billed a healthcare company for nearly $4 million over a ten-year period.

Florida has 550 registered guardians.

Some of the suggestions made included capping the number of wards a person could take on and requiring a judge to approve a DNR order. Sen. Kathleen Passidomo, R-Naples, and Rep. Colleen Burton, R-Lakeland said that increased standards for guardians and more thorough monitoring was called for.

More stringent penalties for guardians who violate the law may be in the works. However, judges would have to approve the removal of any guardian from the state registry, which could be appealed.

Lawmakers said that more money to address the caseload isn’t the issue. Monitoring of guardians needs to be increased, said Passidomo.

As yet, there is no concrete plan in place to address this issue.

The Department of Elder Affairs houses the Office of Public and Professional Guardians, which currently has four employees. Prudom took charge of the department when the agency’s director, who was in charge, when the guardian mentioned above was asked to resign.

The governor’s administration will publish a budget request for the Department of Elder Affairs, which could include more funds for investigators to review complaints.

Reference: Orlando Sentinel (September 16, 2019) “DeSantis, Florida lawmakers consider changes in troubled guardianship program”

The Right Documents for Estate Planning

Having a properly prepared estate plan, that includes all the important documents, including a will and power of attorney, is one of the most important ways to protect your family and yourself. Despite this fact, many adults still neglect to take care of this important task, reports Consumer Reports in its article “8 Essential Steps for Estate Planning.”

A survey from Caring.com showed that as many as 60% of adults don’t have estate planning documents. When they asked families with young children, fewer than one in ten have even designated a guardian to take care of their children, if both parents should die.

What happens when there’s no planning in place? Even the simplest things become more complicated, and complicated things become financial and legal nightmares. When there’s an emergency and decisions need to be made, the entire family is subjected to more stress and costs than would otherwise be necessary.

Here are the eight steps you need to take, right now, to protect your family:

1. Get the professional help you need. The change to the tax law may or may not impact your family and your estate plan, but you won’t know until you sit down with an estate planning attorney. Trying to do this online, may seem like a simpler way, but you will not have the same peace of mind as when you sit down with an experienced attorney—and one who knows your state’s laws.
2. Create a will. This is a legal document that explains how you want your assets to be distributed after you die. It names an executor to carry out your instructions. If you have minor children, this is an especially important document, since it is used to name their guardian. If you have no will when you die (called dying “intestate”), then the laws of your state determine how your assets are distributed and who rears your children. Depending on where you live, your spouse might not automatically inherit everything. 
3. Discuss whether you need a Revocable Living Trust. In most states, when you pass away, your estate goes through a process called “probate.” The courts basically review your estate plan and determine whether everything looks right. The problem is that your will becomes a public document—and so does information about your assets. Some people prefer to keep their lives private by transferring assets to a revocable living trust, which distributes assets according to your instructions at your death. Titles to the assets must be changed, so they are “owned” by the trust. This is known as “funding” the trust. You still retain complete control of your assets, since you are the trustee. However, if you fail to retitle assets, the estate goes through probate. You will also still need a will to protect your minor children.
4. Review your beneficiaries. Whether you remember it or not, when you open many different kinds of accounts—banking, investment—you assign a beneficiary to receive the assets upon your death. Your will does not override the beneficiary designation. Therefore, if you haven’t changed your life insurance beneficiary, for instance, and your ex-wife is still named on the document, she’ll get the entire proceeds of the life insurance policy when you die. This is a very important task. 
5. Have a Durable Power of Attorney (DPOA) created. This is something that protects you, while you are living. If you should become incapacitated, having a durable power of attorney in place will allow that person to manage your financial affairs. Make sure the institutions that have your accounts accept your attorneys’ POA form; you may need to get the one that the institution uses.
6. Don’t forget the Advance Directive. This is also known as a Living Will. It explains your wishes for medical procedures, if you are unable to communicate and explains what you want for end-of-life care. Make sure that your family members know that you have such a document and keep it accessible in case of an emergency.
7. Pick a Healthcare Proxy. The Healthcare Proxy, also known as the Durable Power of Attorney for Healthcare, names someone to convey your healthcare wishes. It should include a HIPAA release clause. This allows medical personnel to release your medical records and speak with the named person about your care.
8. Get it all organized. Think of this step as creating a user’s manual for yourself. All these plans won’t do any good, unless your loved ones know they exist and know where to locate them. Don’t put your estate planning documents and records in a bank safe deposit box, in case it is sealed on death. Your attorney will likely have an original, and you should have your original in a fire-proof safe in a secure location in your home. 

Reference: Consumer Reports (Oct. 24, 2018) “8 Essential Steps for Estate Planning”