Frequently Asked Questions
The primary benefit of having a will is that property will be disposed of in the manner that the deceased chose. When people die without a will, their property is transferred according to the law, and nobody has any say about where the property goes and what happens to it.
Also, when people die without having created a will, their assets will be frozen for a period of time. There are several court proceedings that must occur before property can be passed on. The court has to determine who the heirs of the deceased are and may have to appoint an administrator. The administrator inventories assets, locates the heirs, pays off debts and other claims and finally distributes the property. Certain legal documents will be needed to transfer certain types of property.
A will may also save the deceased’s family from tension and drama. Most of the time, they will simply have to accept how the relative wanted the assets to be distributed, whereas there could be a greater chance of a legal battle if the asset distribution is determined by law.
There are several requirements for advanced directives to be enforceable. An individual must make sure that the language in the advanced directive is enforceable and covers everything that the individual wants it to cover. Also, two witnesses need to sign the document, and there are particular people that do not qualify. There are also certain people that need to have a copy of the advanced directive.
If someone does not have an advanced directive, Texas law provides for how decisions will be made if the person is incapacitated. If the doctor knows what the person’s wishes are, then the doctor will carry out those instructions. If, however, the doctor does not know what the person’s wishes are, Texas law spells out whom the doctor will consult. In order of priority, the doctor will consult
- A spouse
- Reasonably available adult children
- Nearest living relative
- Another doctor, if a doctor who is not involved in the person’s care agrees
An advanced directive will override this priority, allowing the signing individual to choose who makes medical decisions when the individual is unable to. Advanced directives become valid only when the person who created it is unable to speak for himself. Advanced directives can also be revoked or changed at any time. They cover only health care decisions; other documents can be created to help with financial decisions.
Texas offers advanced directives to its citizens. These allow people to officially communicate their health care decisions in the event that they cannot speak for themselves. There are three types of advanced directives in Texas. One is a Directive to Physicians and Family or Surrogates, which requires signing individuals to actually communicate what they want to happen in certain situations. A Medical Power of Attorney appoints a trusted person to make decisions for the individual if the individual becomes incapacitated. The third is an Out of Hospital Do Not Resuscitate Order.
What would happen if loved ones suddenly could not make decisions for themselves? Who would make these decisions? What kinds of decisions would they be able to make? These are overwhelming questions to think about, but they are important ones. Texas residents thinking about these questions may want to consider making an advance directive.
Estate Planning in Houston
Texas residents may want to contact an estate planning attorney to help them create their advanced directive. An attorney will make sure that the advanced directive covers all necessary items and meets all legal requirements. An experienced estate planning attorney can also help with elder law issues, VA and Medicaid planning and other issues related to special needs trusts and powers of attorney. These legal documents can also play a crucial role for families planning for the health and financial futures of their loved ones.
Texans who are considering whether they need a will should know what happens to their property if they die without one. This depends on a lot of factors and can involve a very complicated court process. Texas has laws in place to deal with property transfers after death, but people who have certain wishes for their property disposition may want to talk to an attorney about creating a will.
Separate property and community property for spouses
After people get married in Texas, they own two types of property. One is separate property, and the other is community property. Separate property, as the name says, is property that the spouses each own separately. This will include property owned by each individual before they were married, property received as a gift or inheritance during the marriage and sometimes damages from a personal injury claim. Community property, on the other hand, is property that is owned by the spouses jointly. This includes any money, property or other benefits acquired during the marriage.
If there are no children that are not related to the widowed spouse, all community property is given to the widowed spouse if the deceased spouse dies without a will. Separate property is dealt with in a different way.
Houston-Area Estate Planning
Residents who wish to create a will in Texas should contact an estate planning attorney. An estate attorney can help residents create and execute a legally binding instrument that will help pass property to intended recipients. An experienced attorney can help with a variety of estate planning needs like wills, trusts, asset protection and powers of attorney. Houston-area residents and homeowners should not face complex estate planning issues alone.
You have worked your whole life to preserve your wealth; after you pass on, the last thing you want is for Uncle Sam to wind up with the lion’s share of your hard-earned assets. An inheritance can mean a college education, cash to start a business, or a myriad of other advantages that will give your descendants a leg up in life – but only if the money gets past the taxman.
Your estate generally includes everything you own at the time of your death, including real estate, bank accounts, stock holdings and personal property. If the value of your estate exceeds a certain exempt amount, the IRS will take a cut. There are many strategies that an experienced estate planning attorney can use to help you reduce the taxable value of your estate and pass on as much as possible to your heirs. Specifically, if you are looking to keep a nest egg intact for your grandchildren, a generation-skipping trust can be a highly advantageous instrument.
Without An Estate Plan, Taxable Assets Take a 40 Percent Bite At Each Generational Level
Currently, the top estate tax rate is 40 percent. This means that if you pass your entire estate down to your children, the IRS will take 40 percent of the value that exceeds your estate tax exemption. Assuming Congress does not modify the standard estate tax rate, this also means that when your children pass on an estate to their children – your grandchildren – the value of their taxable estates will be slashed by 40 percent once the government takes its cut. For families with significant wealth, this taxation through each generation can be crippling.
A generation-skipping trust is just what it sounds like; it is a financial vehicle that “skips” your children’s generation and transfers assets directly to your grandchildren. The primary purpose of a generation-skipping trust is to avoid the double round of taxation that comes with the generational transfer of wealth first to your children, and then to your grandchildren. Any nonexempt portion of your transfer to a generation-skipping trust will only be taxed once before being available to your grandchildren.
Generation-skipping trusts also protect familial wealth and assets intended for long-term appreciation. Should your children suffer major financial setbacks – divorce, oppressive medical bills, a failed business, etc. – assets in the trust are not reachable by your children’s creditors.
Setting up a generation-skipping trust does not necessarily mean your children have to be left completely out of the picture, though. The trust can be structured so income generated by the trust’s assets – for example, dividends or interest – is accessible to your children. Of course, a generation-skipping trust can also be customized in other ways to ensure that the assets and any income they generate are distributed according to your wishes.
Ask A Lawyer For Help in Crafting A Comprehensive Estate Plan
A generation-skipping trust can be a powerful tool to lower the tax burden on the assets you would like to pass on. A knowledgeable estate planning attorney can advise you on the full range of legal options that can help you protect your legacy. Contact an attorney to learn more.
It is impossible to prepare for all of the things that will happen during a lifetime. Some people may see their marriages end, while others may sadly experience the death of a loved one. Whenever these events happen, it can lead a lot of people to wonder how they would handle a similar issue.
Many individuals often fail to consider the impact that these events can have on estate planning. These people may have a plan that was previously created that includes ex-spouses or stepchildren in the documents. If these individuals are not removed, it is possible that they may be allowed to receive the property that is listed in the will or trust.
Additionally, if new members later join the family, it is important that they are included in the estate plan that is being created. This is a crucial step for couples having young children, as these documents will be able to include information about who would raise the children if something happens to the parents.
Relocation is another reason to think about updating an estate plan. If a person is moving into Texas from a different state, this could greatly impact the plan that is currently in place. Each state has different estate tax laws, and it is important that an estate plan takes this into consideration to help protect all of the assets at issue.
Individuals should be continually reviewing their estate plans to be sure that they contain accurate information regarding the property to be passed down, as well as the beneficiaries selected to receive these assets. These documents should also include specific guidelines concerning the medical care that should be administered if the individual is unable to make these decisions.
It is important that your documents are kept current, because failing to modify your estate plan may have unintended consequences. This could result in your family members having to contest your will in the courts, which can be a very long and costly process, and may ultimately lead to your assets being substantially diminished. Be sure that you make changes to your will any time you experience a significant event in your life.
If you have questions regarding your will, trust or other documents, speak to an experienced estate planning attorney about your concerns. An attorney will take the time to understand how you want to pass down your property, and help you create a plan that distributes your assets accordingly.
When most people think of estate planning, most think about drafting wills. Although wills are certainly an important part of estate planning, sometimes they are not enough to accomplish an individual’s goals. Sometimes, in addition to a will, it is necessary to set up a trust. Trusts may be set up while the individual is still alive or may be created by a will. Although they are not a complete substitute for a will, a trust offers many benefits not found in a will.
One of the big advantages of trusts is that they allow property subject to the trust to skip the probate process. During this process, the court determines whether the will is valid, identifies the individual’s heirs, ensures that the estate’s debts are paid, and distributes the estate’s assets according to the terms of the will (or according to the law, if the individual died without a will). Unfortunately, this necessary process can be expensive and lengthy. Since the estate foots the bill for the costs of probate, it can significantly decrease the value of the estate, especially if there are complications. Unlike a will, property in a trust skips this process entirely and is distributed according to the provisions of the trust immediately upon the individual’s death.
Another helpful advantage of trusts is that they are much more flexible with regard to distribution of property than a will, as they allow individuals control over when their heirs receive their assets as well as how the assets are to be used. For example, individuals can specify that their children do not receive their inheritances until a certain age or until certain conditions have been met (e.g. finishing college). Additionally, individuals can specify how their heirs may use their assets (e.g. for educational purposes). Wills, on the other hand, do not offer this level of control.
Trusts are also useful for large estates, as they can help avoid taxes. Due to the flexible nature of trusts, they can be structured in a way that minimizes or eliminates the need to pay estate taxes. Additionally, trusts can help protect the privacy of the individuals involved. Since trusts do not have to go through probate, which is a matter of public record, the terms of the trust are not accessible by the public.
Speak With An Attorney
Although a useful option, trusts are not right for everyone. Because of this, it is wise to speak with an experienced attorney before beginning the estate planning process. An attorney can assess your situation and recommend the estate planning solution that would best carry out your goal.
Since long-term care will be needed by the majority and is not covered by Medicare, it is important to have an estate plan that will address this need.
As the elderly population of the United States continues to increase, younger people of today face an issue that their grandparents did not have to worry about—paying for long-term care. The Georgetown University Public Policy Institute estimates that about 70 percent of adults will need long-term care some time after age 65.
Long-term care is required by people that need help with their day-to-day tasks such as cooking, cleaning or shopping because of a chronic illness or disability. Long-term care is a new concept, as the few people that were in these circumstances in the past would be treated by hospitals or nursing homes. However, today, only about five percent of people have conditions warranting a stay in a nursing home of five years or more.
It is a good thing that long-term care exists nowadays, as everyone does not need (or desire) the institutionalized care that a nursing home provides. Long-term care can be home or community-based and includes options such as:
- Home care: Ideal for those that are independent, but need help with tasks such as bathing, transportation or cooking. This type of care involves nurses and health aides visiting the home to provide help with these tasks.
- Senior day care: For independent seniors that do not need a high level of care and would like to socialize with other seniors, there are a variety of day care options available. For this type of care, seniors visit a care center, where basic health care is provided along with a variety of entertainment and social options.
- Assisted living: For seniors who prefer to have their medical care and entertainment options onsite, assisting living is the ideal option. This involves moving into an apartment or facility geared towards seniors. The facility provides onsite assistance with day-to-day tasks as well as entertainment options. However, each residence is able to maintain a high level of independence (unlike a nursing home).
Estate Planning Can Help
Many people do not want (or need) the institutional (and somewhat depressing) environment of a nursing home and want to maintain their independence, so they prefer long-term care instead. However, long-term care is quite pricey, especially if it is not properly planned for.
Since you will likely need some form of long-term care in the future, it is important to engage in estate planning early to work out the means of paying for it. Unfortunately, Medicare will currently only pay 100 days of long-term care in most cases. However, proper estate planning, which may include Medicaid planning, long-term care insurance and other options, can help you ensure that you receive the type of care you want in your golden years.
To learn about your options, contact an experienced estate planning attorney. An attorney can consider your situation and show you the best way of achieving your long-term care goals.