Search Results

Earlier in the year, Senator Bernie Sanders proposed new legislation that could make waves in the estate planning world. The “For the 99.5 Percent Act” was introduced, increasing the odds of sweeping federal estate and gift tax reforms during the second half of 2021. The proposed changes would significantly reduce the current federal gift and estate tax exemptions. Current Exemption Amounts vs. Proposed Changes In 2021, federal estate and gift tax exemptions are $11.7 million per person and $23.4 million per married couple. This allows individuals to gift away up to $11.7 million during their lifetime without triggering a gift tax. The “For the 99.5 Percent Act” would reduce this exemption to $3.5 million per person or $7 million per married couple, effective January 2022. Currently, estates in excess of more than $11.7 million are taxed at a flat 40 percent on the excess amount. Proposed new rates would start at 45 percent for amounts in excess of $6.5 million, increasing incrementally with a maximum rate of 65 percent for those in excess of $1 billion. Under the new legislation, annual exclusion giving will be capped at $30,000. Grantor trusts will no longer be afforded many of the current benefits. Assets owned by a grantor trust will be considered owned by the grantor and included in their estate at the time of their passing. This may potentially subject assets owned by the grantor to the estate tax. While currently existing grantor trusts will be grandfathered in, new trusts would not be. Time to Act The “For the 99.5 Percent Act” has not been finalized, but lawmakers are still debating the merits of these changes. Even if the legislation does become official policy, there is reason to be optimistic. The good news about the grandfather policy is that there is still time to act. If you have been considering a grantor trust for your estate, now is the time to put your plans into action. Reach out to us today by calling (281) 885-8826 or schedule online by clicking here to begin protecting your assets.

A recent high-profile guardianship proceeding has captured the attention of Houston and has shed light on the intricacies and potential legal pitfalls of one subject to a guardianship matter. The unfolding drama has not only underscored the importance of understanding guardianship laws but has also prompted a crucial conversation about how individuals can proactively navigate these complexities to prevent legal turmoil for their loved ones (and themselves). Guardianship matters involve significant decisions that impact the lives and well-being of individuals that have been deemed unable to manage their personal and financial affairs independently. Our goal is to inform you of what guardianship matters consist of and educate you about what you can do to prevent you and your loved ones from being subjected to public court proceedings. If you find yourself or your loved one in need of guardianship, an experienced guardianship attorney is someone to visit with to discuss the options that may be available in your circumstances. Case Analysis On November 27, 2023, Robert Cary McNair, Jr. (“Cary”) filed an Application for Appointment of Permanent Guardian of the Person and Estate for his mother, Janice S. McNair. Janice owns interest in the Houston Texans NFL Franchise and is the Senior Chairman of the Texans and, according to the Application filed by Cary, is allegedly incapacitated and unable to make her own medical and financial decisions. As of now most of the pleadings filed with the court are sealed due to a Temporary Sealing Order, but according to the Harris County Probate Records, the guardianship is being contested by Janice and her son, Daniel Calhoun McNair. Both Janice and her son, Daniel, have filed Affidavits with the court stating that not sealing the records of this proceeding will cause immediate and irreparable harm to all parties involved due to the confidential nature of the information that will be submitted to the court. While most guardianship proceedings are available to the public, the judge assigned to this case has signed a Temporary Sealing Order that restricts the public’s view of the pleadings until an Order has been signed to permanently seal the court records. How to Avoid Guardianship Disputes According to the pleadings filed with the court that are currently available, in addition to the Application filed, Cary McNair also filed copies of Janice McNair’s Medical Power of Attorney and Statutory Durable Power of Attorney. While these documents are executed to help prevent the need of guardianship, it does depend on what these documents allow an agent to do on your behalf. Limiting the authority of the person you appoint as your agent may cause the need for a guardian in the future. Properly executing legal documents such as a medical power of attorney, statutory durable power of attorney, and other healthcare directives is imperative so you can avoid being subject to a time-consuming and costly court process. Some of the documents that your estate plan should consist of include: Statutory Durable Power of Attorney Medical Power of Attorney HIPAA Authorization Directive to Physicians (also known as a Living Will) Declaration of Guardian Last Will and Testament Living Trust Having a comprehensive estate plan is of paramount importance as it serves as a strategic tool to navigate life’s uncertainties and avoid potential issues such as guardianship and probate. Working with an experienced estate planning attorney can help provide peace of mind knowing that you and your loved ones will be properly protected throughout life’s “what ifs”. The Importance of Reviewing Your Estate Plan Regularly reviewing estate planning documents is a cornerstone of responsible financial and personal management, emphasizing the dynamic nature of life’s circumstances. Proactive planning involves not only creating a comprehensive estate plan but also staying attuned to changes in one’s life, assets, and relationships. Life events such as marriages, births, divorces, or changes in financial status can significantly impact the efficacy of an estate plan. By revisiting and updating documents such as wills, trusts, and power of attorney regularly, individuals ensure that their plans remain aligned with their current intentions and the ever-evolving legal landscape. Plan Today While the high-profile guardianship proceeding involving the owner of the Houston Texans, Janice McNair has shone light on the complexities of a guardianship process, it has also illuminated the importance of planning for tomorrow. Proactive planning can minimize the risk of having to go through an expensive, public, and time-consuming court process that the McNair family is currently facing, ensure your intentions are accurately represented, and provide a solid foundation for protecting your loved ones. Engaging with an experienced estate planning attorney is a crucial step in this journey. Contact Your Legacy Legal Care™ today so we can provide you with peace of mind and security amid life’s uncertainties. Call us at (281) 218-0880 or schedule online here to get started today!

Kim Hegwood of Your Legacy Legal Care recently sat down with the Texas Chapter of the National Academy of Elder Law Attorneys (NAELA) to record an informative video on the complexities of guardianship in Texas.  Ms. Hegwood explains that guardianship is a legal process where a court appoints someone to manage an individual’s personal or financial affairs if no less restrictive alternatives are available.  The video highlights the importance of proactive estate planning—such as creating wills and powers of attorney—to avoid guardianship.  If you are seeking guidance on guardianships, reach out to the Houston guardianship attorneys  at Your Legacy Legal Care. Our attorneys are well aware of the legal and emotional complexities surrounding the establishment of guardianships in Texas. If you need assistance regarding guardianship matters, contact  one of our Houston offices today. Transcript: Will I have to go under a guardianship? Guardianship in Texas is a protective legal process where a court appoints a guardian to have partial or full authority over you and or your estate if no less restrictive means are available to assist you.  Common reasons for establishing a guardianship include the failure to execute alternatives to guardianship like medical power of attorneys, durable power of attorneys, trust or other alternative decision making tools, or the inability of supports and services like family support, residential facility placement such as memory care or group home therapies, and similar resources to meet your needs. While there are an increasing number of guardianships in Texas, many can be avoided by doing essential estate planning tools like wills, power of attorneys, and living wills. For example, if a loved one with special needs is transitioning out of high school, the court assesses their ability to execute alternatives to guardianship and whether supports and services like day programs or habilitation can be put in place to avoid the need for guardianship.  Another example would be a parent who is aging and develop dementia, that can no longer manage their finances. If they can establish a durable power of attorney or provide secure access to their assets to trusted people, then a guardianship may be avoided. It’s crucial to discuss the necessity for guardianship or to put alternative systems of support in place with an elder law attorney to explore your options and plan effectively. Use the Find an Attorney feature on the Texas NAELA  website to connect with Texas NAELA member near you.

If you have not heard about the legal battle that Britney Spears has endured over the last nearly 13 years, you are in for a whirlwind of information. In 2008, shortly after what many call a “breakdown,” Britney has been the subject of a court-approved conservatorship (which is known as a guardianship in Texas). Jamie Spears, Britney’s father, was appointed as her conservator, which gave him the authority over her everyday life, finances, and career. Conservatorships (guardianships in Texas) can either be temporary or permanent. If an individual is incapacitated for a short time, then a court will likely grant a temporary conservatorship, but in Britney’s case, the court approved a permanent conservatorship. How can this apply to you? It does not matter whether you are a celebrity worth millions of dollars, or if you are an everyday lay person who provides for their family – nobody knows what the future holds. If Britney had the proper estate planning documents in place before her “breakdown,” she could have appointed her own conservator to manage her finances and other aspects of her life upon her incapacity. It is widely known that Britney has voiced her disapproval of her father being her conservator and that she has asked the probate court to appoint a corporate conservator (Bessemer Trust). Without the proper documents in place, this court proceeding will cost thousands of dollars and take many months to complete. What documents would have avoided this? There are many documents that would have been beneficial to Britney if she had them established before the infamous 2007 Britney breakdown, but two of the most common would have been a statutory durable power of attorney and a medical power of attorney. How a statutory durable power of attorney would have helped: A statutory durable power of attorney would have helped Britney appoint an agent to act on her behalf upon incapacity to manage her finances. In this case, someone other than her father could have been appointed to make the decisions for her that she does not want her father to be making. This single document could have helped avoid Britney’s conservatorship altogether and will also help avoid guardianship proceedings here in Texas. How a medical power of attorney would have helped: Did you know that medical records of an individual are not accessible without a HIPAA authorization? Once someone turns 18, there is a certain order of who may make medical decisions on their behalf or gain access to their medical records. Britney’s mother, Lynne, eventually stepped in because she was concerned for her daughter’s well-being but had to ask the court to be included on her medical treatment since Britney did not have a medical power of attorney and Lynne was not the court-appointed conservator. Establishing a medical power of attorney will ensure that a person you trust will be able to oversee decisions that will be made regarding your medical treatment instead of a court. What to do: Nobody wants to go through the same things Britney Spears has in the last nearly 13 years, but believe it or not, it happens every day. So many people have to petition the probate court to become their loved one’s guardian to ensure they are properly taken care of – although some guardians don’t always have your best interest at heart. That is why it is crucial to establish an estate plan with documents that will allow you to appoint someone you trust to make decisions for you upon your incapacity, rather than having a judge do it later. Your Legacy Legal Care specializes in helping you establish an estate plan that is tailored to your needs and will avoid guardianship and probate. Click here or call (281) 885-8826 to schedule a strategy session to discuss how Your Legacy Legal Care can assist you and your loved ones today.

The sister of the late rock star Prince told the press that the 57-year-old Minnesotan has no known will. She recently has filed court documents requesting that a probate judge appoint an executor to oversee his fortune. Tyka Nelson filed the paperwork in Minneapolis petitioning the court to appoint a special administrator for Prince’s estate, which includes Paisley Park Studios where he was found dead on April 21st, according to The International Business Times in “Prince ‘made no will’ for his $300m estate before death.” Ms. Nelson is the only surviving full sibling of Prince. She reportedly requested that Bremer Trust, a corporate trust company, be named administrator of her brother’s estate. Ms. Nelson said that “immediate action” was required to deal with Prince’s business affairs because he didn’t leave a will before his death. “I do not know of the existence of a will and have no reason to believe that the Decedent executed testamentary documents in any form,” Nelson stipulated in her petition for the appointment of a special administrator. Along with herself, Ms. Nelson listed five of Prince’s half-siblings—John Nelson, Norrine Nelson, Sharon Nelson, Alfred Jackson, and Omar Baker—as heirs in the petition. Prince is estimated to have sold more than 100 million albums during his 40-year career and is thought to have left approximately $27 million in property. Reference: International Business Times (April 26, 2016) “Prince ‘made no will’ for his $300m estate before death” #AssetProtection #Guardianship #TrustsandEstates #Probate #ProbateCourt #Inheritance #Wills #Trusts #estateplanning

A marital trust is a legal tool often used in estate planning to ensure that assets are managed and distributed according to a couple's wishes after one spouse passes away. Understanding how a marital trust works can help families plan their financial futures and protect their assets for generations to come. In this blog post, we’ll dive into what a marital trust is, the different types, its benefits, and the specific considerations under Texas law. What is a Marital Trust? A marital trust, also known as an "A" trust, is a fiduciary arrangement established to provide financial security to a surviving spouse and eventually benefit the couple's heirs, such as children or grandchildren. When one spouse dies, their assets are transferred into the trust, and the surviving spouse is entitled to receive income generated from these assets. In some arrangements, the surviving spouse can also access the trust's principal. Upon the death of the surviving spouse, the remaining assets in the trust are passed on to the designated beneficiaries. Key Benefits of a Marital Trust Avoidance of Probate: One of the primary benefits of establishing a marital trust is that it allows the couple's heirs to avoid the probate process. Probate can be a lengthy and costly legal procedure that involves validating a will and distributing the deceased's assets. By placing assets in a marital trust, they are automatically managed according to the trust's terms, bypassing the need for probate. Reduction of Estate Taxes: Marital trusts are designed to take advantage of the unlimited marital deduction, a provision that allows spouses to transfer assets to each other without incurring estate taxes. However, it is important to note that while the transfer of assets to a surviving spouse is tax-free, the remaining assets in the trust may be subject to estate taxes when the second spouse dies. To mitigate this, a marital trust is often used in conjunction with a credit shelter trust (or "B" trust), which can help minimize estate taxes for the heirs. Protection of Assets: A marital trust can provide significant protection for assets, particularly in situations where there are children from previous marriages. By establishing a marital trust, a spouse can ensure that their assets will ultimately go to their children rather than being transferred to a new spouse if the surviving spouse remarries. Types of Marital Trusts There are three main types of marital trusts, each serving a specific purpose and offering different levels of flexibility and control: General Power of Appointment Trust This type of trust gives the surviving spouse broad powers to decide how the assets in the trust will be distributed upon their death. The surviving spouse can choose to allocate the remaining assets to any beneficiaries they wish, including their own children or other family members. Qualified Terminable Interest Property (QTIP) Trust A QTIP trust allows the trustor to maintain control over the final distribution of assets after the surviving spouse's death. The surviving spouse receives income from the trust during their lifetime, but the principal is preserved for the benefit of the ultimate beneficiaries designated by the first spouse to die. This type of trust is particularly useful in blended families, where there are children from previous marriages. Estate Trust An estate trust provides income to the surviving spouse during their lifetime, with the remaining assets going to the heirs upon the spouse’s death. Unlike the QTIP trust, the surviving spouse does not have control over the trust principal. This type of trust is often used when the trustor wants to ensure that assets are managed conservatively for the benefit of the spouse and then passed on to the designated heirs. Marital Trusts and Texas Law In Texas, marital trusts are governed by both federal and state laws. It is important to understand how these laws might affect the creation and administration of a trust: Community Property Laws: Texas is a community property state, meaning that most assets acquired during a marriage are considered jointly owned by both spouses. When creating a marital trust, couples must carefully consider which assets will be included and ensure that they comply with Texas community property laws. Homestead Exemption: Texas offers strong protections for homestead properties, which are primary residences. A marital trust can include a homestead, but specific provisions must be made to comply with Texas homestead laws, which can affect the ability to sell or transfer the property. Spousal Rights and Elections: Texas law provides certain rights to surviving spouses, including the right to remain in the marital home and to a portion of the deceased spouse’s estate, even if not explicitly included in a will or trust. When drafting a marital trust, it is important to ensure that these rights are respected and that the terms of the trust do not inadvertently violate state law. How to Set Up a Marital Trust in Texas To establish a marital trust in Texas, it is advisable to consult with an experienced estate planning attorney who understands both federal tax laws and Texas state laws. The process generally involves the following steps: Drafting the Trust Document: The first step is to draft a comprehensive trust document that outlines the terms and conditions of the trust, including the designation of the trustee, the beneficiaries, and how the assets will be managed and distributed. Transferring Assets to the Trust: Once the trust document is completed, the next step is to transfer assets into the trust. This might include bank accounts, investment portfolios, real estate, and other valuable property. Naming a Trustee: The trustee is responsible for managing the trust’s assets and ensuring that the terms of the trust are followed. The surviving spouse is often named as the trustee, but it is also common to name a third-party trustee, such as a trusted family member or financial institution, to manage the trust. Regular Review and Updates: It is important to review and update the trust regularly to ensure that it continues to meet the couple’s goals and complies with any changes in the law. Changes in family circumstances, such as the birth of new children or the acquisition of new assets, may also necessitate updates to the trust. Conclusion A marital trust can be an invaluable tool for protecting assets, reducing estate taxes, and providing for a surviving spouse and future generations. By understanding the different types of marital trusts and how they function under Texas law, couples can make informed decisions that align with their long-term financial and estate planning goals. If you are considering setting up a marital trust, consulting with an experienced estate planning attorney can help you navigate the complexities of trust law and ensure that your assets are protected for your loved ones. By understanding and implementing a marital trust tailored to your unique family dynamics and financial situation, you can achieve peace of mind knowing that your estate will be handled according to your wishes, providing security and support for your loved ones both now and in the future.

Planning for long term care is a crucial aspect of retirement. Finding long-term care can be difficult. This is especially true for people without long-term care insurance. It is also a challenge for those who do not have hybrid policies that combine life insurance with long-term care benefits. Understanding the various long term care payment options is essential. It can help protect your assets and secure your retirement, whether through term care benefits from a life term insurance policy or other insurance benefits. In this article, we will explore these options. We aim to provide a comprehensive guide for retirees seeking to navigate this challenging terrain. From government programs to personal assets, we will delve into the different avenues available. We will discuss the importance of family support for long-term care. We will also cover permanent life insurance and legal planning. These factors are essential for effective long-term care. Our goal is to empower you with knowledge. With this, you can make informed decisions that align with your personal values and financial circumstances. Let's embark on this journey together, towards a secure and well-planned future. Understanding Long-Term Care and Its Costs Long term care encompasses a range of services. These are designed to meet personal care needs over an extended period. These services can include assistance with daily activities like bathing, dressing, and eating. Long-term care benefits from certain insurance policies can help pay for medical care, rehabilitation, and therapy. The Importance of Planning for Long Term-Care Planning for long term care is crucial. It can significantly impact your retirement savings and overall financial health. Without a plan, care costs can drain your savings, even if you have long-term care insurance through whole life policies or similar options. This can leave you and your family in a precarious financial situation. Average Costs of Long-Term Care The cost of long-term care can vary greatly. It depends on the type of care needed and the location. On average, the annual cost of a private room in a nursing home can exceed $100,000. Home health care services can cost upwards of $50,000 per year. These figures highlight the importance of planning for long term care costs. Navigating Government Programs Government programs can provide some assistance with long term care costs. However, they often have limitations and eligibility requirements. Medicare and Medicaid are the two primary government programs that can help with long term care. Understanding what they cover and how to qualify is crucial in planning for long term care costs. These programs may not cover all types of care or all care settings. More payment options, like benefits from life insurance policies, might be needed. Medicare: What It Covers and What It Doesn't Medicare is a federal program that provides health coverage for individuals aged 65 and older. It also covers some younger individuals with certain disabilities. However, Medicare's coverage of long term care is limited. It primarily covers medically necessary care, like skilled nursing or rehabilitation services, and typically only for a short period. Medicaid: Eligibility and Coverage for Long Term Care Medicaid is a program by the federal and state governments that assists low-income individuals with their medical expenses. It can cover a broad range of long-term care services, including nursing home care and home health care. However, eligibility for Medicaid  is complex. It depends on income, assets, and level of care needed. Each state has its own rules about eligibility and applying. Therefore, it's important to contact an Elder Law attorney for information. Utilizing Personal Assets and Savings Personal savings and assets can be a direct source of funding for long term care. The cost of care can quickly use up your resources, even if you have permanent life insurance or other long-term care coverage. Consider the impact of long-term care costs on your retirement savings. You may need to explore other options to protect your assets and ensure your financial security. Reverse Mortgages and Home Equity If you own your home, a reverse mortgage can provide funds for long term care. This type of loan allows you to convert part of your home's equity into cash. However, reverse mortgages come with risks and costs. It is important to understand the terms and implications involved before proceeding. Life Insurance Options: Riders and Benefits Some life insurance policies offer options that can help pay for long term care. These include long term care riders and accelerated death benefits. Long term care riders allow you to use your death benefit for long term care. Accelerated death benefits let you get a tax-free payment from your life insurance while you are still living. Annuities and Trusts as Long-Term Care Funding Sources Annuities and trusts can be effective tools for funding long term care. They can provide a steady income stream and protect your assets. However, these options require careful planning and understanding. It's important to consider the tax implications and eligibility requirements. Annuities with Long Term Care Riders Annuities with long term care riders can provide a steady income for care expenses. These riders allow you to use your annuity's income for long term care costs. However, not all annuities offer this option. You should understand the terms and conditions before purchasing an annuity. Asset Protection Trusts Asset protection trusts can be used in estate planning to cover long term care costs. These trusts can protect your assets from being depleted by long term care expenses. However, setting up a trust requires legal expertise. Consult with an estate planning attorney  to understand the benefits and drawbacks. Veterans' Benefits and Community Assistance Programs Veterans' benefits and community assistance programs can be valuable resources for long term care. These programs can provide financial assistance and support services. However, eligibility requirements and benefits can vary. Research and understand these programs thoroughly to ensure you are able to secure maximum benefits. Exploring Veterans' Aid and Attendance Benefits Veterans' Aid and Attendance benefits can help cover long term care costs. These benefits are available to eligible veterans and their surviving spouses. However, the application process  can be complex. Seek guidance from a knowledgeable professional or veterans' service organization. State and Community Programs for Seniors State and community programs can provide assistance with long term care costs. These programs may offer services like home care, meal delivery, and transportation. However, availability and eligibility can vary by location. Explore local resources and understand what assistance is available in your community. Family Support and Informal Caregiving Family support and informal caregiving can play a significant role in long term care. This can be a cost-effective solution, especially for early-stage care needs. However, it's important to consider the emotional and physical toll on family caregivers. Respite care and caregiver support services can be essential. The Role of Family in Long Term Care Family members often step in to provide care for loved ones. This can include personal care, household tasks, and managing medical care. However, it is important to have open discussions about care expectations and potential compensation. Formal caregiver contracts can help clarify these arrangements and provide financial support for family caregivers. Legal and Financial Planning for Long Term Care Legal and financial planning is a crucial part of preparing for long term care. This includes setting up powers of attorney, living wills, and potentially trusts. Consider the impact of long-term care costs on your estate and legacy planning. Asset protection and preservation should be a key part of your strategy. Powers of Attorney and Living Wills Powers of attorney and living wills let you choose someone to make decisions for you if you can't do it yourself. This includes financial decisions and health care decisions. It is important to have these documents in place before they are needed. They provide peace of mind and can prevent family disputes during a difficult time. Consulting with Financial Planners and Elder Law Attorneys Consulting with a financial planner or elder law attorney  can provide personalized advice for your situation. They can help you navigate the complexities of long-term care payment options, including hybrid long-term care insurance, and legal planning. These experts can explain how different payment methods impact taxes. They can also discuss the chance of Medicaid reclaiming funds from your estate. Their expertise can be invaluable in creating a comprehensive long term care plan. Conclusion: Creating a Comprehensive Long-Term Care Plan Creating a comprehensive long term care plan involves considering all potential payment sources and understanding their implications. It's about more than just the financial aspect; it is also about ensuring quality care and preserving your independence as much as possible. Remember, it's never too early to start planning. The sooner you start, the more options you will have. Regularly review and update your plan to ensure it remains relevant. To learn more about how our team can assist you with asset protection,  schedule your strategy session here  or give our office a call at (281) 324-8742.

According to an article from NJ 101.5, “Is that will still valid if you move?,” the majority of the time that will is going to be valid in the new state. The first step in the analysis is to back track to the previous state of residence. Make certain that the will is validly executed pursuant to the statutes of the state where it was signed. The law in most states stipulates that the will must be signed by the testator, or the individual creating the will, as well as two witnesses. That’s what it will take to make the will validly executed. In most cases, if you have a will that’s prepared by a local estate planning attorney and then you move out of the state, it will be valid and acceptable to the courts there and admitted into probate in the new state. But of course, there are a few exceptions. For instance, not every state will accept what is called a “holographic will,” which is a will that’s in the handwriting of the testator but isn’t witnessed or has just a single witness. The next step in will scrutiny is based upon the probate laws of the state to which you move. In the event the will can be admitted to probate, there may be some provisions in the will that conflict with laws in the new state. These provisions would be invalid. One example of a state-specific probate law is the restrictions as to who is permitted to serve as executor. So even if your will is validly executed, the individual you designated as the executor might not be able to serve if the law of the new residence state prohibits it. There are states that have restrictions on non-family members serving as executors for those who live out-of-state. The last security step is to ensure that the plan makes sense in the new state of residence. For example, in some states, probate is a relatively simple process—all you might need is a validly executed will. However, in other states, a living trust might be a better strategy if the probate process is more expensive or time consuming. Trusts are not subject to the probate process, unlike a will. In addition, if you move to a community property state like California, you will find that the law is very different as far as ownership of marital assets. You should conduct a thorough review of your estate plan with a qualified estate planning attorney whenever you move to a new state. Reference: NJ 101.5 (June 17, 2016) “Is that will still valid if you move?” #EstatePlanningLawyer #ProbateAttorney #ProbateCourt #Wills

Every state has intestacy laws that govern whom among a deceased’s relatives will receive the property and assets when there’s no will or trust. These laws vary from state-to-state. The Huffington Post’s recent article, “The Consequences of Dying Without a Will,” discusses some general (i.e., not state specific) guidelines as to what can happen to an individual’s assets, based on whom they leave behind. Married with children: When a married person with children dies without a will, everything that is “jointly owned” automatically goes to the surviving co-owner (typically the spouse or child) without probate. Probate is the judicial process that distributes a deceased person’s assets. For all other separately owned property or individual financial accounts, most states award one-third to one-half to the surviving spouse and the rest to the children. Married with no children or grandchildren: Some states give everything to the surviving spouse—or everything up to a certain amount; however, other states award only one-third to one-half of the decedent’s separately owned assets to the surviving spouse. The rest generally goes to the deceased person’s parents, or if they are dead, to brothers and sisters. Jointly owned property, investments, financial accounts, or community property goes to the surviving co-owner. Single with children: In this case, state laws say that the entire estate goes to the children in equal shares. If an adult child of the deceased is also dead, that child’s children (the decedent’s grandchildren) divides their parent’s share. Single with no children or grandchildren: The estate will usually go to the deceased person’s parents. If both of the parents are deceased, it will typically be divided by the brothers and sisters, or if they are not living, their children (nieces and nephews). If there are none, the estate goes to the next of kin. If there are no living relatives, the state will take it. To be certain that your assets go to the individuals you want, have a will created. Even if you have a simple estate and an uncomplicated family situation, you still need a will. And if you have a more complicated financial situation, a blended family or considerable assets, you definitely need to plan your estate with a will and other documents. Sit down with an experienced estate planning attorney to be sure you cover all of the issues and scenarios to help avoid family confusion and fighting after you are gone. Reference: Huffington Post (March 28, 2016) “The Consequences of Dying Without a Will” #Court #HoustonEstatePlanning #Inheritance #Wills

This is a very important step in estate planning because at your death, certain assets pass to beneficiaries named on your accounts. It doesn’t matter if someone else is named as the recipient of your assets in your will! Let’s look at one of the big implications of failing to review your beneficiaries. The Ex-Spouse The New Hampshire Union Leader explains in “The law determines your beneficiaries unless you intercede,” that even though New Hampshire has a lower divorce rate than the national average, if you’re recently divorced, you need to do some fast estate planning. The divorce decree you signed doesn’t automatically terminate your ex’s beneficiary designation on separate documents like your employer-sponsored retirement accounts, IRAs, and life insurance policies. If your former spouse remains as the beneficiary on an account, he or she will most likely inherit those assets instead of your children or your new spouse. Let’s take that a step further: Even without a divorce, there can be unintended implications for your money after your death. If, in your retirement plans, you named your spouse as the primary beneficiary, he or she has the right to transfer all or part of the retirement assets into his or her own IRA account after your death. The surviving spouse is entitled to then name the children from a previous or future marriage as beneficiaries once it is his or her own money. Something like that could result in the original IRA owner’s children being legally cut out of any benefits. Spousal Waiver Spousal rights laws say that your spouse must be the primary beneficiary of a 401(k) or profit-sharing account. Your spouse can waive this requirement in writing so that other estate planning strategies can be implemented. A spouse who is financially independent and wants to earmark the account for philanthropic pursuits may want to use the waiver; or where children from a first marriage are more likely to need the money. If you’re unmarried, you can name whomever you want as the primary beneficiary. Tax laws also detail how retirement plan assets must be distributed to your beneficiaries at your passing, but if this is done properly, your beneficiaries may be allowed to continue the tax deferral for some time. Note that these rules are complicated and change frequently, so you should discuss them with an experienced estate planning attorney. It is important to be certain that your intended beneficiary designations are in sync with your estate documents. To ensure that this is the case, visit your estate planning attorney. Your attorney will help with terms like “per stirpes” and “per capita.” A qualified trusts and estates lawyer can also help you deal with planning for minor children and those with special needs. Reference: The New Hampshire Union Leader (January 24, 2016) “The law determines your beneficiaries unless you intercede” #AssetProtection #EstatePlanningLawyer #IRAs #401k #EmployerSponsoredRetirementAccounts #Inheritance #Beneficiaries #PlanningfortheFuture #PowerofAttorney #LifeInsurance #HoustonProbate #HoustonTrustsandEstates

Also up in the air is the optional deduction of state and local sales taxes in place of state and local income taxes, which could impact your decision to make a big-ticket purchase before year’s end, a recent Arizona Republic article says. The article, “Time for seasonal planning for taxes, charities, more,” notes that one of the extenders in limbo is the option for people age 70½ and older to donate an IRA distribution to charity, rather than include it first as taxable income. This could be an issue for those seniors trying to decide how much of their required minimum distributions to take before the end of the year. A large 50% tax penalty applies on the amount of required minimum distributions that isn’t taken. The capital-gains rules are pretty much the same this year, but some will see some big losses for the first time in a while due to the late-summer swoon in the stock market. Investors are always prudent to look at paper gains and losses in taxable accounts, with an eye on realizing losses before end of the year. If your losses exceed gains, up to $3,000 of the excess can be used to offset ordinary income. Additional losses can be carried forward to future years. Otherwise, taxpayers generally would be better off deferring taxable income to next year, if they can, while accelerating deductions so they can be taken in 2015. However, that strategy doesn’t necessarily play out if you think you’ll have much larger deductible expenses next year. In that case, it might be wise to group deductions into either this year or next, if you believe you’re not going to qualify to itemize both years. For instance, charitable donations are one type of deductible expense with timing that’s easy to control. Make certain that your gifts count by conducting some research on the groups. Look for non-profits with missions with which you agree and search for their impact, such as the number of meals served, low-income homes built, or animals rescued. Non-profits that are run efficiently are better choices, where most of the money raised is earmarked for programs and not overhead, like executive salaries. Make sure that the charity is for real. Many seniors are susceptible to giving away their money for reasons such as fear, loneliness, or cognitive problems. Fraudsters prey on these folks. Be aware of several telltale signs that there might be a problem. Some are obvious, like large, unexplained loans taken out by a senior, or if you see that certain personal belongings are missing. Also, watch for large credit-card charges, gifts to a caretaker, routine bills not being paid, and changes to the person’s will or other estate-planning documents. A sudden increase in spending and atypical, big withdrawals are red flags. Another tip-off is a senior looking to buy risky assets that are out of character with his or her stated investment objectives. It can be a good idea for elderly folks to sign emergency contact forms—before it’s needed—that authorizes a trusted adviser to speak with adult children or other relatives in case of emergencies or if they feel there’s a problem. Otherwise, account-privacy laws can stifle this type of communication. Reference:  Arizona Republic (October 23, 2015) “Time for seasonal planning for taxes, charities, more” #CharitableGiving #HoustonElderLaw #ElderAbuse #CapitalGains #HoustonEstatePlanningLawyer #TaxPlanning

One couple who wanted to live in a community for people 55 and older in an area they had always admired used a reverse mortgage to finance building their home in that development. The New York Times article, “The quiet comeback of reverse mortgages,” reports that reverse mortgages, which allow homeowners age 62 and older to tap into their accumulated home equity without facing monthly payments in return, have received a bad rap over the years because of abuses by lenders. The volume of reverse mortgages decreased to about 30,000 this year from about 115,000 at their highest point in 2009. However, with reforms, they’re making a slight comeback and are viewed as a way of helping some retirees fill in the gaps in their future income. A reverse mortgage can provide cash or “longevity insurance” when other sources of retirement income dwindle. They also can be a source for out-of-pocket health care costs or other sudden financial needs. Similar to a conventional mortgage, a reverse mortgage obligation is met when the house is sold by the owners, the last owner has died or the home is sold by heirs. Any equity left over is kept by the last homeowner. Also known as “Home Equity Conversion Mortgages,” these loans are insured by the government. The Federal Housing Administration makes up any debt owed from the final loan balance and net proceeds from the sale. You don’t have to worry about being “underwater” on the loan in case the home’s value is less than the mortgaged amount. Reverse mortgages can give retirees with only modest savings but little or no housing debt the ability to stay in their homes and can provide a financial safety net for those worried about outliving their retirement funds. A reverse mortgage can eliminate the burden of conventional housing debt, monthly payments of interest and principal, and can assure heirs that they wouldn’t be required to make up any losses if the home sold for less than the value of its mortgage. Stricter regulation from the FHA and the Consumer Financial Protection Bureau—like mandatory counseling prior to lending—and lower costs have helped increased their popularity among seniors. Some folks don’t have enough savings to get through retirement, so they may use all of their wealth—including home equity—as a retirement income source. Others use reverse mortgages to create a cash buffer in the event a dip in the stock market depletes their retirement portfolio. Rather than selling stocks and funds when the market is down, they can use their home equity through a reverse mortgage line of credit to provide an income stream. One other rationale for seniors looking at reverse mortgages is to finance the costs of long-term care. Although it can be a source of ready cash, a reverse mortgage isn’t for everyone. If you want to leave your home to your heirs by letting them sell your home at your death, a reverse mortgage will leave no equity in your home. If you’re thinking about a reverse mortgage, do your homework and don’t be in a rush. Consult an elder law or estate planning lawyer for more information regarding how this might work for your situation. Reference: The New York Times (July 2, 2016) “The quiet comeback of reverse mortgages” #EstatePlanningLawyer #Inheritance #ElderLawAttorney #ReverseMortgage #RetirementPlanning #LongTermCarePlanning