Texas Estate Planning

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. 

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 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 Estate Planning So Important?

If you are new to the concept of estate planning, you can get swamped with issues fairly easily. You should still soldier on. Start with the basics, says Forbes’ recent article entitled “The Importance Of Estate Planning.” 

An estate plan is a collection of legal documents that details the way in which you want your assets distributed after you die, along with how you want people you select to handle health and financial decisions, if you’re unable to do so for yourself while you’re alive. 

A comprehensive estate plan written by an experienced estate planning attorney can help you feel more confident about the future because you’ll know your loved ones will be cared for and that the legacy you leave behind is the one you planned. Well thought-out planning now can help decrease any taxes and probate fees and make certain that your loved ones will have less to worry about and less stress when you are gone. However, if you don’t make plans for your estate, it can result in unintended complications for your family.  

Let’s look at some of the essential estate planning documents: 

• Will: This is the standard document in your estate plans. Your will designates an executor (or personal representative) to administer the distribution of your assets as you want. In your will, you can also appoint guardians of minor children who will care for them. 
• Durable Power of Attorney: This document names a trusted family member, friend, or advisor to serve as your agent to act on your behalf in your financial and legal matters.  
• Healthcare Proxy: It will name a trusted individual to make medical decisions for you when you are unable, and permits access to your medical records (some institutions may require more documentation for full access to medical records).  
• Living Will: This is where you can state your end-of-life care wishes. Living wills can cover pain relief and whether you would want a ventilator, feeding tube or resuscitation.  

You also need to regularly review and update your estate plan. There may be changes in probate and tax laws, as well as life changes, such as marriage, divorce, or the birth, adoption, or death of a family member that require a revision of your plan. 

Reference: Forbes (March 2, 2020) “The Importance Of Estate Planning” 

Enjoying Your Retirement to the Fullest

You’ve worked and saved for decades, and at last, retirement has arrived. Just like other milestone events, like having a baby or launching a business, there are many surprises along the way. The way to make the most of your retirement, says The Motley Fool, is described in the article “5 Retirement Tips for 2019—and Beyond.”

For starters, don’t center your retirement finances on Social Security. Many workers can’t or don’t set aside enough funds for their retirement. They think that they’ll be able to rely on Social Security. Doing so will put a tight crimp on your retirement lifestyle. Social Security’s average yearly benefit for most Americans is $17,532. If you can live on that, wonderful, but most people can’t. The program was designed to replace 40% of most people’s income, and most seniors need more than double that amount to live, as they did during their working years. Focus on retirement savings throughout your career.

Most retirement income is taxable. The things you paid taxes on while you were working, are still taxable when you retire. If you’re used to receiving deductions on a paycheck, having to pay quarterly taxes may be a bit of a surprise. You will need to pay taxes on IRA or 401(k) withdrawals, unless your retirement savings are all in Roth accounts. Gains from investments held in non-retirement accounts are also subject to taxes. If you can convert your IRAs or 401(k)s into Roth’s, you’ll pay taxes when you do the conversion, but not on the withdrawals.

Try to retire with friends and family. The sad truth is, retirees are 40% more likely to become depressed than working people. If that doesn’t make sense to you, consider the social aspects of your working life. Having too much time on your hands can lead to boredom and restlessness. You want to make sure that you have friends or family members who are also retired to socialize with. If no one else in your circle is ready or willing to retire, what will you do every day after the initial two-month retirement honeymoon?

Keep an open mind about returning to work. No matter how well you’ve saved, life happens. Your home may need a major repair, or you or a spouse might experience a health crisis. It’s a good idea to have a plan to be able to return to work, either on a consulting basis to a prior employer, working part time or even starting a business on your own.

Don’t skimp on the important details, like preparing your estate plan. If you created an estate plan years ago, now is the time to review it to make sure it still works for your retirement life. If you’ve never had a will prepared, call a qualified estate planning attorney and get it done. You’ll also need a power of attorney and a health care proxy, so that your family and your spouse are protected in the event of anything unexpected happening to you.

Finally, ask yourself what you want to do with the next ten or twenty years of your life. Retirement can be a fulfilling and enjoyable experience, especially if you are pursuing your dreams. That might be going fishing every day, writing a novel or dedicating yourself to grandchildren or the community. Embrace it!

Reference: The Motley Fool (June 2, 2019) “5 Retirement Tips for 2019—and Beyond”

When Is an Estate Plan Really Finished?

It makes sense: your life changes. Your goals may have changed. You may have been divorced, married, or your children may have gotten married or divorced. Your financial status may have changed. All of these are reasons why the Times Herald-Record advises readers to review their estate plans, as detailed in the article “5 steps to securing your elder estate plan.”

Here are steps to make this an easier process:

Step One: gather up all your documents, which may take some time. This includes your will, powers of attorney, health care proxies, living wills, any trusts and any other documents.

For clarity, here are some definitions. A will is the document that states where you want your assets to go when you die. It is reviewed by the court in a proceeding called probate, but only after your death. Assets in a living trust (or other types of trusts, depending on your situation) do not go through this process. Creating a trust results in a legal entity that owns the assets it contains. The trust assets go to the beneficiaries upon death, as directed by you to the trustee. In many instances, trusts save time, money and avoid litigation over inheritances.

Powers of attorney name the person you appoint to make any legal, business or financial decisions for you, should you become incapacitated. A health-care proxy names the person to make your medical decisions, if you are unable to do so. Living wills are used to express your wishes for end-of-life care.

Step Two: review your documents. Make sure that everything is signed. You would be surprised how many important documents aren’t signed. Read the documents to see who was named as the executor of your will and who is the trustee of your trusts. Are those people still able to undertake these responsibilities? Do you still want them making decisions for you? 

Step Three: make a list of all of your assets. Note how they are titled—what names are on the accounts—and what are the values of each? Include retirement accounts like IRAs, 401(k)s, insurance policies and annuities and check to see if you named a beneficiary. Do you still want that person to be the recipient of the asset? Make sure that you have also named a contingency beneficiary.

Step Four: what information would your loved ones need, should you become unable to communicate? They’ll need information about your medications, the name and contact information for your primary care physician, your estate planning attorney, your CPA and your financial advisor. You may want to arrange for a “family meeting” with your healthcare team and your legal and financial team (two separate meetings), so everyone in your family is familiar with your professional teams. A list of where your documents can be found and who you want to receive personal items, may also be helpful.

Step Five: don’t forget to tell your trusted family members, where your important information is located and what lists exist. You don’t have to review everything with them, but if they know where things are at the time of your passing, they will have an easier time of settling your estate.

Reference: Times Herald-Record (Dec. 1, 2018) “5 steps to securing your elder estate plan”

A New Advanced Directive

As a general part of estate planning, it is important to also plan for end-of-life scenarios when you might not be able to make your own decisions because of dementia or some other disability. This type of planning is fairly standardized.  It normally consists of a general durable power of attorney, a health care power of attorney and a living will.

One perceived issue with these forms is that they only become effective when someone has reached the stage of being completely unable to handle their affairs on their own. The documents do not take into account what happens as someone slowly loses their cognitive abilities due to dementia.

The New York Times reports on this problem in "One Day Your Mind Might Fade. At Least You'll Have a Plan."

A doctor has come up with a new advanced directive that accounts for the different stages of dementia and cognitive decline. It lets people decide what they would want at each stage of decline.

The idea is that this approach gives people more control and helps them create a better plan for dealing with Alzheimer's and other forms of dementia. However, not everyone is convinced that this new directive is necessary. Many people believe that existing end-of-life documents are adequate.

If you are interested in this new directive, it is a good idea to go to an estate planning attorney so you can not only plan for your estate but also make plans for your own end-of-life care.

Reference: New York Times (Jan. 19, 2018) "One Day Your Mind Might Fade. At Least You'll Have a Plan."

What to Do after an Alzheimer's Disease Diagnosis

There is a common myth that people with Alzheimer's are completely incompetent and cannot be trusted to make their own decisions. It is not true as the early stages of the disease are relatively mild. 

People who are diagnosed with the disease early enough can still make their own decisions. However, as the disease progresses most do eventually lose the ability to make their legal decisions as NorthJersey.com points out in "Planning becomes vital following Alzheimer's diagnosis."

The article suggests that people who receive an Alzheimer's diagnosis should get a general durable power of attorney, a health care power of attorney and a living will. 

The powers of attorney will allow the person to appoint someone else to handle financial and medical affairs, respectively, when the Alzheimer's patient is no longer able to do so. The living will is used to give advanced directives about what type of treatments doctors should employ to keep the patient alive.

These are important documents to have. 

Getting them after an Alzheimer's diagnosis is solid advice. However, even better advice is not to wait until after receiving such a diagnosis. All three documents are part of general estate planning. There is no need to wait until you know you will need them to get them. 

Plan ahead and get them now before an issue of competency is raised.

Reference: NorthJersey.com (Dec. 27, 2015) "Planning becomes vital following Alzheimer's diagnosis."

 

Former NBA Star Could have Future Ex-Wife Making Medical Decisions

A story in the Las Vegas Review-Journal, "With open divorce case, Khloe Kardashian could be making Lamar Odom's medical decisions,"explains just who is allowed to make medical decisions.

Nevada law spells out who will make medical decisions for patients who become incapacitated, which are sometimes called substituted judgment statutes. In the Silver State, spouses or registered domestic partners are first in line. If Odom does not have advanced directives, legal documents stating his health care choices, Khloe would be the one to make these decisions. 

There are several types of advanced directives, including living wills and medical powers of attorney. These estate planning documents let individuals make their wishes known to family, friends, and health care professionals to avoid confusion in cases like Odom's.

Odom may have an advanced directive which would apply. By signing an advanced directive, you select the individual you want making your decisions for you.

The Nye County Sheriff's Office stated that Odom had been using cocaine and sexual performance enhancers in the days prior to being discovered unconscious at Love Ranch brothel in Crystal, about 90 minutes outside of Las Vegas. (Nevada is the only state with legalized prostitution, and county regulations say that business licenses can be revoked if brothels have drug issues).

In addition to his 2009 and 2010 NBA Championships with the LA Lakers, Odom is known for being part of the Kardashian family. Khloe filed for divorce in 2013 after four years of marriage.

Reference: Las Vegas Review-Journal (October 18, 2015) "With open divorce case, Khloe Kardashian could be making Lamar Odom's medical decisions"

 

Special-Purpose Trusts for the Mentally Ill and Those Suffering from Addiction

The New York Times recently published “For Parents With Troubled Adult Children, Financial Hurdles Abound,”which talks about what can be done to help a loved one stricken with mental illness. It noted that there are many painful and emotional issues in situations of mental illness and addiction that affect children, but also there are financial plans that parents can use, such as a Special-Purpose Trust, that provides care for the suffering child and peace of mind for the parent.

A special-purpose trust is different from a special-needs trust, which is frequently implemented to pay for additional needs of those receiving government benefits where the government has strict restrictions on the recipient’s assets. A special-purpose trust can be used to provide children more of the life they might have enjoyed without mental illness or addiction, and it allows the parents the flexibility to make changes with the distributions.

Special-purpose trusts are more complicated to establish than regular trusts because of the powers they give to the trustees and the restrictions they place on distributions. However, the toughest part of creating a special-purpose trust is getting parents to accept them as necessary: parents must first acknowledge that their children will never fully recover. 

Parents are advised to set out some very specific criteria for distributions into trust documents, for example, staying on medication or staying sober for a certain period of time. In addition, those with a family history of mental illness and addiction issues should get a power of attorney and health care proxy for children over 18 who are away at college. In the event that something happens to their child, the parents will have access to medical records and will be able to help.

Work through these issues with an experienced estate planning attorney to make sure that you are doing your best to help your child.

Reference: New York Times (August 28, 2015) “For Parents With Troubled Adult Children, Financial Hurdles Abound”