Estate Planning

How to Use a Trust to Care for a Loved One With Special Needs

Published on: April 30, 2025 | By David W. Miller

How to Use a Trust to Care for a Loved One With Special Needs

Leaving money outright to a loved one with a disability can backfire. Supplemental Security Income (SSI) and Medicaid impose strict asset caps—usually $2,000. Exceed that limit, and benefits vanish until funds deplete. A carefully drafted special needs trust (SNT) provides extra resources while preserving public assistance. Consult an Austin estate planning and probate lawyer at McCulloch & Miller, PLLC to structure the trust correctly.

Why Standard Inheritances May Hurt Benefit Eligibility

SSI and Medicaid count cash, investment accounts, and even modest savings as resources. A direct inheritance pushes the beneficiary over the threshold, forcing them to spend down funds on basic needs those programs once covered. An SNT owns the assets instead, so they do not count toward eligibility. Because Texas participates in Medicaid estate recovery, bypassing the beneficiary’s name on the title also prevents the state from later demanding reimbursement.

Key Features of a Third-Party Special Needs Trust

A third-party SNT uses someone else’s money—typically parents or grandparents—to support the beneficiary. Major provisions include:

A discretionary distribution standard allowing payments for education, therapies, travel, and entertainment.
A prohibition on disbursing cash directly to the beneficiary, which could count as income.
Remainder beneficiaries who inherit unused funds when the primary beneficiary dies, avoiding Medicaid payback.

Texas law lets you appoint a “trust protector” who can replace an underperforming trustee or tweak administrative language without going back to court—an extra layer of security families appreciate.

Estate Planning for Texas Newlyweds

Published on: April 25, 2025 | By David W. Miller

Wedding gifts fill kitchen cabinets; thank-you cards go out; life settles. Estate planning rarely tops a newlywed’s priority list, yet marriage transforms financial and legal rights overnight. Drafting documents now cements the groundwork for decades of partnership. An Austin probate lawyer at McCulloch & Miller, PLLC makes the process straightforward and affordable.

Marriage Automatically Changes Property Rights

Texas community property rules give each spouse an undivided half interest in most earnings and acquisitions. If you die without a will and have no children, your spouse inherits community assets, but certain separate property can split between your spouse and parents or siblings. A simple will directs everything to your spouse and streamlines probate. Skipping one invites unwanted heirs into later proceedings. Clarifying ownership also matters if one partner brings significant premarital savings or debts; the right documentation prevents confusion down the road.

Beneficiary Designations Need Immediate Review

Life insurance, 401(k) plans, and IRAs pass outside probate based on named beneficiaries. Many newlyweds still list parents or siblings from pre-marriage forms. A quick update aligns account payouts with marital goals and prevents delays while your spouse gathers funds for funeral costs or mortgage payments. While editing forms, confirm that each retirement plan allows spousal rollovers, which preserve tax advantages and defer income tax on inherited funds. For brokerage or crypto accounts, adding payable-on-death instructions keeps those assets moving directly to your chosen beneficiary without court intervention.

What Happens to Your Estate Plan if You Move to Texas from Another State?

Published on: April 17, 2025 | By Thomas W. McCulloch

Major job hubs and no state income tax draw countless families to Austin every year. New barbecue spots delight, but new legal rules lurk beneath the excitement. Moving to Texas can shift how assets pass, how debts divide, and which court has jurisdiction. Collaborating with an Austin probate lawyer at McCulloch & Miller, PLLC ensures your previous estate plan still works under Lone Star law.

Texas Community Property Rules May Surprise You

Many states follow equitable-distribution principles; Texas designates most income earned during marriage as community property. If you and your spouse came from Illinois—where separate property rules differ—joint accounts may now belong half to each spouse regardless of title. That shift influences inheritances, creditor claims, and Medicaid eligibility. Reviewing titles, beneficiary forms, and premarital agreements protects expectations and prevents accidental disinheritance.

Validity of Out-of-State Wills in Austin Courts

Texas honors wills that were valid in the state where executed, but small technical differences still matter. For example, a self-proving affidavit signed in another state may lack language Texas courts require. An additional witness statement filed during probate can fix the issue, yet delays occur. A quick re-execution in Austin—with two witnesses and a Texas-compliant self-proving clause—eliminates extra steps.

Why You Need Alternate Executors, Trustees, and Guardians

Published on: April 10, 2025 | By David W. Miller

Naming an executor feels final—until that person moves overseas, develops health problems, or simply says no. Similar obstacles affect trustees and guardians. Without alternates, Texas courts decide who steps in. That may not match your vision. Engage a Dallas probate lawyer at McCulloch & Miller, PLLC to build a fiduciary lineup that adapts to real life.

Life Happens—Primary Fiduciaries May Decline

Executors handle time-sensitive tasks: filing the will, gathering assets, notifying creditors. If your chosen friend dies first or declines, delays follow. Trustees administer trusts for years; guardians raise children for decades. Counting on a single individual ignores life’s unpredictability—job transfers, marital changes, or strained relationships.

Texas Statutes Provide a Solution but Not Always the Best One

When no alternate exists, Section 304 of the Texas Estates Code lets beneficiaries petition for appointment. Courts prefer close relatives, but beneficiaries may disagree on who that should be. Litigation erupts, and estate funds pay the bill. Writing an alternate list prevents that fight by giving judges clear marching orders.

How a Lady Bird Deed Can Help Texas Homeowners Avoid Probate

Published on: March 30, 2025 | By Thomas W. McCulloch

How a Lady Bird Deed Can Help Texas Homeowners Avoid Probate

One common goal in the estate planning process is crafting a plan that allows your beneficiaries to avoid probate. Probate can often be a long and drawn-out process, and many of our clients use various estate planning tools to avoid probate court altogether. One such tool, which we discuss on today’s blog, is the lady bird deed.

What Is the Lady Bird Deed?

The lady bird deed is a kind of deed that allows a homeowner to directly pass his property to a beneficiary upon his death. The name “lady bird deed” came from former president Lyndon Johnson’s wife, Lady Bird Johnson. President Johnson transferred his property directly to his wife upon his death, and the now common estate planning strategy ended up bearing her name.

With a lady bird deed, the homeowner formally names the beneficiary that will inherit the property. At the same time, though, as long as he is alive, the homeowner retains full control of the property. He can mortgage the property, sell it, lease it, or reside in it according to his own wishes. He is not required to consult the beneficiary for any major or minor decisions. Then, as soon as he dies, the property goes straight to the homeowner’s beneficiary without any probate court’s involvement.

How Medicaid Estate Recovery Affects Your Assets and How to Plan Ahead

Published on: March 24, 2025 | By Thomas W. McCulloch

Medicaid estate recovery is a scary process, and it can affect families across the country during already difficult times. How can you plan ahead and help guard against Medicaid estate recovery? This blog serves as a starting point, but remember that each person’s circumstances are different, and each person might benefit from a slightly different strategy when thinking through their own opportunities moving forward.

What is Medicaid Estate Recovery?

Medicaid estate recovery is the process through which the government seizes a decedent’s assets after he or she passes away. Typically, the government will initiate this process when the decedent benefited from Medicaid and when that person’s estate has assets that the government can use to recoup the money spent on his or her healthcare.

The government can legally seek reimbursement for any costs that the decedent used for a nursing home or long-term care facility, home services, prescriptions, and/or hospital services. The government is only allowed to seize the decedent’s assets that are part of their probate estate – so if you have an asset that is set up to bypass probate entirely, it will not be subject to the recovery process. Assets that are part of probate and would be subject to recovery can include (but are not limited to) a home, cash, and personal belongings.

Charitable Giving Through Estate Planning

Published on: March 16, 2025 | By Thomas W. McCulloch

Many of our clients have causes or organizations that matter deeply to them and that they want to financially support. There are many ways to incorporate charitable giving into your estate plan, and the tool you end up choosing to structure your charitable giving will depend on your own goals and finances.

Option 1: Use Your Will or Trust

You always have the option of giving assets to a charity by naming that charity directly in your will. You can also establish a trust to give money – there is a) a charitable lead trust, which allows you to donate during your lifetime while still leaving money for your heirs, and b) a charitable remainer trust, which provides income during your lifetime but gives the leftover assets to a charity at the end of the trust’s term.

Option 2: Leverage Your Retirement Account

Certain retirement accounts are eligible for charitable giving, meaning you can leave the retirement assets to a nonprofit when you die. By gifting the money in your retirement account, you both avoid a major tax penalty in your estate and allow the receiving charity to avoid paying income taxes on your gift.

The Role of Affidavits of Heirship in Texas: When and How They Can Be Used

Published on: March 13, 2025 | By David W. Miller

An affidavit of heirship is a relatively simple estate planning tool that can have a major impact on certain beneficiaries. On today’s blog, we review the basics around affidavits of heirship, so that you can familiarize yourself with when and how they can be used for your advantage. If you or your loved ones have specific questions about these affidavits, contact a Houston estate planning attorney you can trust.

What is an Affidavit of Heirship?

An affidavit of heirship is a legal document that plainly states the names of a decedent’s heirs. Any individual declaring that they are an heir must swear that they bear a relation to the decedent. At least two people who are not involved in the decedent’s estate (but who did know the decedent) must sign the affidavit, which helps boost its reliability. The affidavit requires certain facts regarding the decedent’s information, each heir’s information, and the property to be distributed. When filling out an affidavit of heirship, it is important to make sure these details are accurate in order to ensure a smooth transfer of property from one party to the next.

Why Use an Affidavit of Heirship?

Affidavits of heirship come most in handy when A) a person dies without a will and B) that person’s estate is relatively small. The affidavit of heirship is most commonly used to transfer real estate, as opposed to cash or accounts. The decedent’s heirs can file the affidavit with the court, and once the court approves the affidavit, the heirs can bypass probate entirely. This saves beneficiaries time and money, and it helps ensure efficiency as assets transfer from the decedent’s estate to the beneficiaries.

What Happens if a Beneficiary Dies Before You Do?

Published on: March 9, 2025 | By Thomas W. McCulloch

As part of your estate planning process, you choose beneficiaries to inherit different parts (or the totality) of your estate. What happens, though, if a beneficiary dies before you do? Today’s blog covers several different possible outcomes that your loved ones could expect in this scenario.

To start, if one of your known beneficiaries passes away, you should contact your estate planning attorney as soon as possible to update your will. You should generally update your estate plan every 3-5 years or after a major life event. The death of a beneficiary qualifies as one of these major life events.

If you are not able to amend your estate plan in time, though, there are several possible outcomes for your assets. The first possibility occurs when you have named both a primary beneficiary and a contingent (or secondary) beneficiary in your estate plan. In this scenario, if your primary beneficiary dies, the contingent beneficiary will stand to inherit.

Using Life Insurance Trusts to Protect Your Legacy

Published on: February 20, 2025 | By Thomas W. McCulloch

If you are looking for ways to ensure that your loved ones are well-protected in the event of your death, consider the advantages of a life insurance trust. A life insurance trust is a form of legal agreement that puts the grantor’s life insurance into a trust. The designated trustee gains control of the insurance policy, and when the grantor dies, the trustee is responsible for distributing the money from the policy to the grantor’s designated beneficiaries.

Why Use a Life Insurance Trust?

There are several key advantages to the life insurance trust. First, by putting your life insurance into a trust, you allow the funds from the policy to bypass probate completely. This gets money into your beneficiaries’ hands more quickly, more efficiently, and more privately.

The life insurance trust also guarantees some form of liquidity when you die. The cash from the policy can go toward settling the estate, paying off debts, covering the cost of a funeral, or paying estate taxes. The money could also provide your beneficiaries with immediate cash for payments that you might have been making before your death, so that they can have time to figure out a long-term solution in your absence.