Articles Posted in Estate Planning

Oftentimes, the most difficult part about estate planning is reckoning with the fact that by the time your documents are executed, you will be long gone. As sobering as this reality can be, it is also a reminder that your estate plans should be legally valid, thorough, and clear regarding your wishes for how your assets are distributed. By taking the time to create a detailed estate plan now, you can ensure that your wishes are respected and honored down the road.

Create an Estate Plan

The first key to making sure your wishes are honored is drafting an estate plan, whether it be a will, trust, or other set of documents that lays out instructions for your loved ones. The estate plan should be specific, explicit, and accurate. It should cover the totality of your assets, leaving nothing to chance. The estate plan should also be updated every 3-5 years; that way, you do not risk having an outdated will that the probate court struggles to reconcile with your most recent circumstances.

Name an Executor

It is also smart to think now about who you will want to be your estate’s executor. This person will be responsible for making sure the probate court carries out your wishes; in other words, you should only appoint someone that you know and trust will have your best interest at heart. Your executor should also be fully briefed on the contents of your will, so that he or she knows what to expect when going before a probate court.

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It can be tempting to use online resources to create an estate plan – the resources come at a low cost (or at no cost at all), and they offer an easy, seemingly efficient way to get your plan together. As a group of Houston estate planning attorneys, we often tell our clients that these online plans work until they don’t work. While creating an estate plan online might end up being legally valid, there are also risks in these estate plans that might cause obstacles in the future for your loved ones.

Risks in Online Estate Planning

There are three major deficiencies that we often see in online estate plans. First, the plan might not be valid. In Texas, for a will to be above board, it needs to be a written, properly executed, self-proving document. If the will is typed, it must be signed by two witnesses who saw the will’s writer sign the documents. Without these requirements, the estate planning documents might not be able to go through probate.

Secondly, the will might not truly reflect the wishes of its writer. For example, if you say in your will that you would like to pass your real property to your children, the court will want to know if the property is community property or separate property. If it’s community property, does the co-owner know about your will’s provisions? Is it even possible to pass your share of the property onto your children, or does your contract with your co-owner say otherwise? How will the property be passed onto your children? It is important to address questions like this in your estate planning documents, and without these provisions, you run the risk of failing to accurately capture your wishes in the documents.

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If you are on the lookout for an estate planning attorney that can help you craft a plan that’s right for you, there are many factors to consider and many options to weigh. Today, we review some of the basic things you should be looking for as you are searching for your Houston estate planning attorney. At the end of the day, it is important to remember that there is not one size that fits all; every attorney is different, every client is different, and every attorney-client relationship should center on that client’s personal goals.

Individualized Plans

The first thing you should look for in a Houston estate planning attorney is whether the attorney tries to employ a cookie cutter approach to your estate plan. Does the attorney suggest only one approach, or does the attorney provide recommendations based on your stated interests? Does the attorney have a set plan for your estate before you walk in the door, or is the attorney open to hearing about your priorities?

By looking for an attorney that makes recommendations based on your individualized circumstances instead of based on a cookie cutter approach, you can ensure you are finding representation that is client-centered and that has your best interest in mind.

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If you have worked with an attorney to create an estate plan, congratulations – you have completed what many consider to be the hardest part of the estate planning process! At this point, it is natural to wonder if (and when) you might need to update the plan. Today, we review some basics that can help you decide if you might need to revisit an estate plan you created in the past. At the end of the day, if you have questions about whether an update is right for you, speak with a Houston estate planning attorney that can take a look at your circumstances and advise you on the next steps that might be right for you.

Timing

As a basic principle, you should update your estate plan every three to five years. Even if the changes you make are minimal, you won’t regret revisiting the plan with your attorney to make sure everything is still up to date.

Life Changes

There are other occasions that warrant an update to your estate plan. If, for example, you move states, you will want to speak with an estate planning attorney in your new state to talk about making changes to your estate plan. Your plan will need to comply with the relevant state laws, which requires some basic updates. You might also consider an update if you reach a milestone like starting a business, retiring, or finding a charitable cause that you care about.

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One common misconception in estate planning is that everyone’s estate documents revolve around a will. While many of our clients do decide to use a will, many others use the trust instead of or in addition to their will. The trust has purposes that go beyond estate planning, though, and today, we go over some of the basics on Texas trusts to give you a framework for understanding just how useful this tool can be.

What is a Trust?

A trust is a financial arrangement. When the grantor, the creator of the trust, forms the trust, he or she appoints a trustee. This trustee has control of whatever money that the grantor puts into the trust. The trustee doesn’t necessarily use the money for his or her benefit, though. The trust money benefits one or more beneficiaries, named specifically by the grantor. The trustee’s job is to administer the trust and manage the assets so that the beneficiaries can profit from the trust property.

Types of Trusts

There are several kinds of trusts, and each one helps achieve a different goal. In estate planning, we often talk about the testamentary trust. This kind of trust goes into effect when you die, and you maintain the right to change it any point during your lifetime. Once you pass, the trust becomes irrevocable, or unchangeable.

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A power of attorney is a binding legal document that gives an individual the power to make decisions on your behalf. In Texas, there are five basic types of powers of attorney, all of which we will review on today’s blog. By understanding all of the types and their various functions, you can be better prepared to appoint a power of attorney that works best for you.

The Five Types of Powers of Attorney

General power of attorney: this type of power of attorney is the most basic one, in that it gives general, broad power for the individual you choose to act on your behalf. General power of attorney lasts until you, the person giving the power, become either incapacitated or disabled.

Limited power of attorney: when giving limited power of attorney, you authorize a person to act on your behalf only with regards to a specific situation. The power of attorney does not extend to matters beyond what you explicitly name in your document.

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At McCulloch & Miller, we understand – meeting with an estate planning attorney for the first time can feel daunting. You might not know what to expect, and you might feel slightly nervous about what questions might be asked of you. Today, we review some basic ways to prepare for this consultation. Overall, our hope is that you can find a Houston estate planning attorney that puts your worries at ease and takes the reigns of your estate planning process, so that you can rest easy, knowing your plans are on the right track.

Setting Expectations

First and foremost, you should remember that your estate planning attorney has your best interest in mind. He or she will make the process as easy for you as possible, and if you are preparing for your first consultation, there will be many other opportunities for you and your attorney to communicate down the road. Do not feel like you need to walk out of your first consultation with everything wrapped up and tied with a bow; estate planning is a process, and this is just the first step.

Gathering Documents

In order to provide your Houston estate planning attorney with some basic information, you should gather important documents to bring with you to your consultation. These documents might include: any previous wills or estate plans, bank account information, tax forms, investment account statements, and information about debts you might owe.

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Estate planning does not have to be complex, but it’s also not naturally the simplest of processes. As a group of Houston estate planning attorneys, we see some of the same issues again and again in the ways our clients (and the broader public) think about estate planning. Today, we review what we have noticed as the top five estate planning blind spots.

1. People don’t think they need estate planning documents.

We often hear from clients that they don’t think they need estate planning documents, since they have not accumulated significant wealth, don’t have high incomes, or maybe just have what they consider to be very simple property and assets. Even if this is the case, it is still important to speak with an estate planning attorney and draft a will that protects your loved ones in the future. Everyone, regardless of income level, has to think about how their assets will pass through probate, and it’s important to get an early start so you can make sure you have the best plan for yourself and your family.

2. Individuals assume all estate plans are cookie cutter.

For individuals that want to pass all of their assets to one person, or that have simple and small estates, it is tempting to think that “one size fits all” when it comes to estate planning. However, this can be a dangerous mindset. Every person’s estate plan will necessarily be a bit different, and you put yourself at risk of impeding the probate process if you do not come up with a plan that accounts for your individualized circumstances.

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As healthcare improves over time, the median age of adults in the U.S. also rises. While this is certainly a net positive for adults and their families, it also means that individuals have more planning to do regarding their elder years. Today, our blog reviews some important topics regarding senior public benefits planning in Texas that you might want to think through as you and your loved ones prepare for the future. As always, there is more to discuss than included in this post, and we recommend you reach out to a trusted estate planning attorney to learn more.

Medicaid Eligibility

Medicaid is a state-provided benefit that provides healthcare for individuals with limited resources. If you qualify for Medicaid, the State calculates a co-pay for you, which you then pay through Social Security or other sources of income. Then, when you go to a doctor’s office, the government pays the difference between your co-pay and the rate that the medical facility charges.

There are two main criteria you must meet to qualify for Medicaid: you must be both medically eligible and financially eligible. To be medically eligible, a doctor must sign off, confirming that you need a certain level of care. To be financially eligible, your assets and income cannot be higher than the government’s designated limit.

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Take it from us: thinking about death is very rarely how anyone wants to spend their time. As estate planning attorneys, however, we have learned that it is a necessary evil. In our experience, the clients whose families are best protected long-term are those who have taken the time and energy to carefully think through what will happen in the event of their death. On today’s blog, we consider a topic that is not glamorous but that is still incredibly important: planning for the day after your death.

The day after your death, your loved ones will be grief-stricken and perhaps unsure of where to turn. At McCulloch & Miller, we believe that we all have an obligation to our loved ones to make sure they have as little to worry about as possible when that day comes. When your loved ones find themselves in a funeral home, a hospital, or a hospice center, they will want to deal with as few logistics as possible.

Given that reality, there is a checklist we recommend making now, as soon as possible, that your loved ones can access in the event of your death. This checklist should include:

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