Texas Estate Planning

Exactly Why Do I Need a Will?

Some people mistakenly think not having a will allows their assets to bypass the time and expense of probate. That’s not true–if you die without a will, your property still must go through probate, says Fed Week’s recent article entitled “The Importance of Having a Will.”

If probate avoidance is an issue, you can create a revocable trust to keep control over the trust assets while you’re alive.

Assets placed in trust during your lifetime can be distributed at your death, under the terms of the trust, without going through probate.

There are many types of trusts, and they all establish a financial arrangement between three parties:

• The Trustor
• The Trustee; and
• The Beneficiaries.

The person creating the trust is known as the trustor or grantor. The trustee manages the trust and disperses income or principal from the trust according to specific terms.

When you draft a will, you shouldn’t forget about it. Any births, deaths, marriages or divorces all may create a need to revisit your so-called “last wishes.”

After each change, make sure your current will is both safe and accessible. You can leave your will with your executor. If you decide to keep your will somewhere else, your executor and other family members should know its location. The estate planning attorney who prepared your will should have a copy, as well as a memo revealing the location of the original.

Regardless of where you put your will, have another document for your funeral and burial instructions. Wills generally aren’t read until days or weeks after death, so that won’t help your family make prompt decisions about a funeral or a memorial service.

As a result, a separate letter should be used to specify your final wishes and your executor should know where these instructions can be found.

Ask an experienced estate planning attorney to help you write your will.

Reference: Fed Week (Nov. 2, 2022) “The Importance of Having a Will”

Should I Know About Advance Directives?

Advance directives address the type of healthcare and medical treatment you’d want if you become incapacitated. MarketWatch’s recent article entitled “What happens if you’re incapacitated? How to get your advance directives in order” says if you don’t make these decisions now—and complete the necessary forms to state your wishes—someone else will make the decisions for you down the road.

Advance directives typically consist of a living will and a power of attorney for healthcare. Each state has its own statutory advance directive form. Because these state forms are legal documents, the wording can be pretty formal. People will sometimes forget they’ve filled out the forms. They also forget where they put them.

After completing the proper forms, you must get them to your medical providers, so they know whether to resuscitate you during a medical emergency or administer artificial feeding or hydration.

Make sure you have a discussion with your physician, family and close friends about your values, goals and fears concerning advance care planning.

You should tell them what forms of medical intervention you’d find acceptable and unacceptable—and what level of life-sustaining treatment you’d like if you’re deemed permanently unconscious. That may include considering these types of situations:

• If I am unconscious, in a coma, or in a vegetative state and there is little or no chance of recovery
• If I have permanent, severe brain damage that makes me unable to recognize my family or friends (for example, severe dementia)
• If I need to use a breathing machine and be in bed for the rest of my life
• If I have a condition that will make me die very soon, even with life-sustaining treatments
• If I have pain or other severe symptoms that cause suffering and can't be relieved
• If I have a permanent condition where other people must help me with my daily needs (for example, eating, bathing, toileting).

When sharing your end-of-life wishes with your physician, he or she may enter your comments into your electronic health record. That way any other healthcare provider with access to those records (such as a hospital system) can retrieve them.

Reference: MarketWatch (Oct. 14, 2022) “What happens if you’re incapacitated? How to get your advance directives in order.”

The Benefits of a Good Estate Plan

If you don’t have a comprehensive estate plan, state law will control. That’s unlikely to coincide with what you would choose to do. MSN’s recent article entitled “What is estate planning?” discusses the benefits of estate planning.

Minimizes taxes. Clever structuring of flexible retirement accounts, such as a Roth IRA, can help funnel more tax-free money to your heirs, while other tax-planning strategies like strategic charitable giving can help you mitigate estate taxes.

Prevents family disputes. The possibility of a fight about who gets what of value or even a sentimental treasure can arise without proper planning.

Clarifies your directives. Although you may have always intended for your niece to get a certain heirloom, unless it’s written out in your estate plan, it may not get into her hands. If you clearly spell out your wishes with the help of an experienced estate planning attorney, you can help your loved ones remember you fondly or at least get what you intended.

Avoids the time and expense of probate court. Done correctly, a trust can help your family avoid the hassles of probate court. Because of the ease of using a trust, more people are doing an end-run around probate and setting up their assets this way. You don’t need as much wealth as you might think to make it worthwhile.

Keeps your family assets together. Trusts can be a good way to make sure your money stays in the family. With the help of an estate planning attorney, a trust can keep a beneficiary from blowing your lifetime of hard work in a few years.

Protects your heirs. If you have minor children, a will can instruct who will take care of them. A living will can help heirs avoid some difficult health decisions during a parent’s end of life.

Sound estate planning can help avoid several potentially troubling problems.

Reference: MSN (Oct. 13, 2022) “What is estate planning?”

What Is a Living Will?

During a medical crisis, family members frequently are called upon to make decisions quickly on whether to withhold or provide life-sustaining treatments. You may already have a durable power of attorney for health care—a legal document that allows your designated agent or proxy to make medical decisions for you, if you become incapacitated. However, the instructions in a living will can be used only when the person named in the living will has no prospect of recovery or cure.

Forbes recent article entitled “How Does A Living Will Work?” says that adding a living will to your estate plan can mean the difference between your family having questions later or knowing they made the right decision for you, when you were unable to make end-of-life medical decisions for yourself.

A living will is a legal document that states your wishes on receiving or declining medical care or life-sustaining treatments in the event you become terminally ill or injured and unable to communicate those decisions for yourself. The person named in the living will is known as the principal or declarant. The individual named to carry out the wishes of the principal on the living will may be called the attorney-in-fact or health care proxy.

The living will gives limited authority to the attorney-in-fact on behalf of the principal who’s no longer able to communicate their preferences to withhold or withdraw artificial means of life support or life-sustaining treatments. The document  should include your wishes for receiving or going without treatment when your condition isn’t expected to improve and treatment would extend your life for only a limited time.

The living will is designed to apply only in very limited situations when the principal is so terminally ill that the principal will likely die within a short period of time. Life-sustaining treatments discussed in a living will may include:

• Artificial nutrition (via feeding tube)
• Artificial hydration (via feeding tube or IV)
• Heart-lung machines
• Dialysis
• Ventilators
• Cardio-pulmonary resuscitation (CPR); or
• Other extraordinary measures.

Living wills can also detail issues like pain management and palliative care and can even include provisions like “I would prefer to die at home.”

Reference: Forbes (Aug. 18, 2022) “How Does A Living Will Work?”

What Did George Harrison Leave to His Sister in His Estate Plan?

Ex-Beatle George Harrison promised to take care of his sister, Louise, for the rest of her life. She thinks he’d be horrified to know that she no longer gets a pension. Even so, she says she’s not upset about it. She did share the one regret she had, though.

MSN’s recent article entitled “George Harrison’s Sister Said He Would Have Been ‘Horrified’ to Learn She Was Cut Off by His Estate” says that in the 1990s, Harrison and Louise had a fight over a bed-and-breakfast. She converted her Illinois home into a bed-and-breakfast called “A Hard Day’s Night.” Louise didn’t own the establishment but used her name and connection to George to promote it. He didn’t appreciate this, and the siblings lost contact.

Before his death, though, the two siblings reconnected. Louise drove to New York to visit him in the hospital, where he was getting treatment for cancer.

“We were able to look into each other’s eyes again with love,” she told the Liverpool Echo in 2001. “It was a very, very positive and loving meeting. I felt very much at peace as I drove home after seeing him. I hated seeing him in that shape when he had been such a vital, wonderful man. But he still had his humor. It was distressing, but also I knew that he was on his way, back to where he belonged.”

In 1980, Harrison set up a pension for Louise and paid her $2,000 every month. He told her that he wanted to take care of her.

“My second husband was an alcoholic. Both of my husbands were alcoholics,” Louise told the Daily Mail in 2016. “I had been beaten up a few times. George said to me, ‘Don’t go get married again. You don’t seem to choose the right people very well. Let me fix you something to live on.’ It was supposed to be a lifelong pension. It was a small amount. That was fine. That was okay.”

A year after Harrison’s death, however, his estate unexpectedly cut her off. Louise says she never knew why. While she thought her brother would have been upset, she said that she tried not to be.

“George would’ve been horrified knowing I was cut off,” she said. “It was such a small amount. And I think he left something like $300 million. Let’s put it this way, some people were more into money than I was. Money is not the most important. I learned that from George.”

“I live modestly, I don’t hold anyone responsible for me and I’m happy to live like that,” she said.

Reference: MSN (Sep. 23, 2022) “George Harrison’s Sister Said He Would Have Been ‘Horrified’ to Learn She Was Cut Off by His Estate”

What Is an Estate Plan?

An estate plan is a collection of legal documents that gives you control over what happens to you, your assets and any dependents you may have if you become disabled or when you die. The plan can include a will, power of attorney forms, trusts and more.

KRDO’s recent article entitled “An estate plan is the best way to plan for the worst. Here’s how to create one” says that having an estate plan is like carrying the umbrella for the inevitable rainy day.

A will. This is a written statement of who should get a deceased person’s assets. A will can also name who will assume guardianship of minor children. The requirements for a will to be deemed valid vary state to state. You should consult with an experienced estate planning attorney to make certain that yours is legally binding. Without a will, state intestacy laws govern who receives your assets.

Power of attorney. A health care power of attorney form grants permission for someone else to make decisions on your behalf if you are unable to do so. The financial power of attorney names a person to manage your finances should you be unable to yourself.

Trusts. A trust is an agreement to hold assets for the benefit of another person. Parents create trusts to ensure their assets are properly allocated to their children. Without a trust, the children might inherit all the money at once.

Life events — like turning 18 and going to college, getting married, changing careers, or moving states — often trigger estate planning. Pregnancy is also a good time to begin the process. Work with an experienced estate planning attorney to ensure that your documents are legally correct. In addition to updating an estate plan after a major life change, you should review your plan very few years.

An estate plan can take little time to draft, perhaps a week or two with an attorney, who will work with you every step of the way. Don’t put this important task off.

Reference: KRDO (Sep. 16, 2022) “An estate plan is the best way to plan for the worst. Here’s how to create one”

What is a Life Estate?

A life estate is a type of property ownership that divides the control and ownership of a property. The person who creates the life estate for their home and assets is known as the “life tenant.” While a tenant retains control of the property, he or she shares ownership during their lifetime with the remainderman (the estate's heir).

Quicken Loans’ recent article entitled “What Is A Life Estate And What Property Rights Does It Confer?” explains that while the life tenant lives, they’re in control of the property in all respects, except they can’t sell or encumber the property without the consent of the remaindermen. After the life tenant passes away, the remainderman inherits the property and avoids probate. This is a popular estate planning tool that automatically transfers ownership at the life tenant's death to their heirs.

The life estate deed shows the terms of the life estate. Upon the death of the life tenant, the heir must only provide the death certificate to the county clerk to assume total ownership of the property.

Medicaid can play an essential role in many older adults’ lives, giving them the financial support needed for nursing facilities, home health care and more. However, the government considers your assets when calculating Medicaid eligibility. As a result, owning a home – or selling it and keeping the proceeds – could impact those benefits. When determining your eligibility for Medicaid, most states will use a five-year look-back period. This means they will total up all the assets you’ve held, sold, or transferred over the last five years. If the value of these assets passes above a certain threshold, you’ll likely be ineligible for Medicaid assistance.

However, a life estate can help elderly property owners avoid selling their home to pay for nursing home expenses. If your life estate deed was established more than five years before you first apply for benefits, the homeownership transfer would not count against you for Medicaid eligibility purposes.

To ensure you’re correctly navigating qualifying for Medicaid, it’s smart to discuss your situation with an attorney specializing in Medicaid issues.

Reference: Quicken Loans (Aug. 9, 2022) “What Is A Life Estate And What Property Rights Does It Confer?”

Important Documents in Your Estate Plan

The Durable Power of Attorney (DPOA) and a Health Surrogacy or Advanced Health Directive are used for situations where you can’t make decisions for yourself, explains Parent Your Parents recent article entitled “What You Should Know about Durable Powers of Attorney and Health Surrogacies.”

A Durable Power of Attorney (DPOA). This is written authorization to represent or act on another’s behalf in private affairs, business, or legal matters. The person authorizing the other to act is the “principal” or “grantor.” The person given the power is called the “agent” or “attorney-in-fact.” There are two types of power of attorney: (1) a Springing Durable Power of Attorney, which “springs” into action when you become incapacitated; and (2) a General Durable Power of Attorney, which becomes effective as soon as it is signed and continues until you die.

If you live in a “Springing POA” state and move to a “Durable POA” state, the document is treated as a Durable Power of Attorney, and your agent can act without your consent. You should consider who you trust to be your agent.

It is typically a family member, a friend, or a professional agent. You should also have an alternate designated who can step in if something happens to your first choice and he or she is unable to serve.

Health Surrogacy or Advanced Directive. This document is called a variety of things: a Power of Attorney for Health, Designation of Health Surrogate, or a Living Will. No matter what it’s called, you’re appointing an adult to make healthcare decisions for you when you are unable to make them for yourself.

When you’re in an accident, unconscious, or injured and need a specific medical procedure, the designated agent steps in and makes important decisions in your stead.

If you’re in your 60s but still don’t have a legal document describing what you want to happen when you’re incapacitated, speak with an experienced estate planning attorney.

Your family, close friends, and healthcare professionals should know how you feel about end-of-life treatments and have your detailed directions as to various circumstances and how you would like them handled.

Reference: Parent Your Parents (Sep. 15, 2022) “What You Should Know about Durable Powers of Attorney and Health Surrogacies”

Who will Receive Naomi Judd’s Estate?

Country music legend Naomi Judd, who died in April, named her husband Larry Strickland as executor of her estate. She was married to Strickland for 33 years. According to court documents, he’ll have “full authority and discretion” over her estate and won’t need to the “approval of any court” or permission from any beneficiary.

The Los Angeles Times’ recent article entitled “Naomi Judd reportedly left daughters Wynonna and Ashley out of her final will” says that the 76-year-old Judd prepared the will on Nov. 20, 2017.

The will also provides that Strickland is entitled to receive compensation for his executor duties and that he would be reimbursed for legal fees, disbursements and other “reasonable expenses” in the administration of Judd’s estate. Judd‘s brother-in-law, Reginald Strickland, and Wiatr & Associates President Daniel Kris Wiatr will serve as the estate’s co-executors.

Reports say that Wynonna isn’t happy with her mother’s will and “believes she was a major force behind her mother’s success.”

Naomi died from suicide on April 30^— a day before she and her daughter Wynonna, known as “The Judds,” were to be inducted into the Country Music Hall of Fame.

The daughters teamed up in their grief to tearfully accept the Hall of Fame honor for their late mother.

Wynonna later decided to tour despite her mother’s death. She enlisted some major stars to join her on the road.

In May, Ashley revealed that her mother had used a firearm and said she found her mother’s body when she was visiting her mom’s Tennessee home.

“Our mother couldn’t hang on to be recognized by her peers. That is the level of catastrophe of what was going on inside of her,” she told ABC’s Diane Sawyer. “Because the barrier between the regard in which they held her couldn’t penetrate into her heart and the lie the disease told her was so convincing.”

The Judds were known for songs including “Why Not Me,” “Love Can Build a Bridge” and “Mama He’s Crazy.”

Reference: Los Angeles Times (Aug. 1, 2022) “Naomi Judd reportedly left daughters Wynonna and Ashley out of her final will”

Do Young Adults Need a Will?

Everyone, age 18 and older, needs at least some basic estate planning documents. That’s true even if you own very little. You still need an advance health care directive and a power of attorney. These documents designate agents to make decisions for you, in the event you become incapacitated.

The Los Angeles Daily News’ recent article entitled “Estate planning, often overwhelming, starts with the basics” reminds us that incapacity doesn’t just happen to the elderly. It can happen from an accident, a health crisis, or an injury. To have these documents in place, you just need to state the person you want to make decisions for you and generally what those decisions should be.

An experienced estate planning attorney will help you draft your will by using a questionnaire you complete before your initial meeting. This helps you to organize and list the information required. It also helps the attorney spot issues, such as taxes, blended families and special needs. You will list your assets — real property, business entities, bank accounts, investment accounts, retirement accounts, stocks, bonds, cars, life insurance and anything else you may own. The estimated or actual value of each item should also be included. If you have life insurance or retirement plans, attach a copy of the beneficiary designation form.

An experienced estate planning attorney will discuss your financial and family situation and offer options for a plan that will fit your needs.

The attorney may have many different solutions for the issues that concern you and those you may not have considered. These might include a child with poor money habits, a blended family where you need to balance the needs of a surviving spouse with the expectations of the children from a prior marriage, a pet needing ongoing care, or your thoughts about who to choose as your trustee or power of attorney.

There are many possible solutions, and you aren’t required to know them before you move ahead with your estate planning.

If you are an adult, you know generally what you own, your name and address and the names of your spouse and children or any other beneficiaries you’d like to include in your plan. So, you’re ready to move ahead with your estate planning.

The key is to do this now and not procrastinate.

Reference: Los Angeles Daily News (July 24, 2022) “Estate planning, often overwhelming, starts with the basics”