Estate Planning

Three of the Most Common Mistakes People Make When Creating DIY Wills

Published on: April 17, 2024 | By Thomas W. McCulloch

In Texas, “DIY wills” are not uncommon. A DIY will is a will drafted and finalized entirely by the person planning for his or her death. At our firm, we often say that DIY wills work until they don’t work. While they can end up being a fine option for those wanting to cut costs of hiring an attorney, they also carry inherent risks that can end up causing headaches and excessive fees for loved ones down the road. Today, we review some common mistakes that we see individuals make when they do decide to create a DIY will.

Mistake #1: Planning Only for Death

A common misconception is that wills and estate plans should only include provisions that instruct your loved ones on how to distribute your assets after you die. It is also important, though, to address what happens while you are still alive. For example, do you have a provision about power of attorney? Do your loved ones know how to handle a situation in which you might need to be intubated or resuscitated? Have you adequately addressed how you want to spend the final years of your life (i.e. in a nursing home or long-term care facility), and do you have the funds accessible to do so? These are all important considerations to include when drafting a DIY will.

Mistake #2: Failing to Update the Will

Circumstances change, and if you experience a life change, you will need to update your will accordingly. Wills are therefore not “one and done” documents; instead, if you purchase property, get married or divorced, have a child or grandchild, or acquire significant debt, you should add provisions about these events in the will you have drafted.

What Should You Do if You Don’t Have a Trusted Person to Oversee Your Affairs?

Published on: April 17, 2024 | By David W. Miller

Part of drafting a last will and testament is naming an executor, or a person appointed to carry out the terms of the will. Oftentimes, the author of the will chooses to name a family member or close friend as the executor, leaving his or her estate plans in the hand of a trusted and close individual. Other times, however, it can be just as beneficial to go down a different road and choose a person that you don’t personally know but that you still trust to oversee your affairs.

Appointing a Professional Fiduciary

If you are struggling to think of a trusted person to oversee your affairs, consider appointing a professional fiduciary to serve as the executor to your will (or, in the alternative, as the trustee to your trust or as the agent for your power of attorney). Professionals charge a fee for serving in this capacity, which can either be a fixed hourly rate or a percentage of the total assets in the estate. When you choose a professional fiduciary, this person will take on the same roles and responsibilities that a trusted family member would take on, carrying out the terms of your estate planning documents and making sure everything goes according to plan once you are gone.

Sorting Through Your Options

It can be difficult to figure out which professional fiduciary to trust, if this is the route you choose to take. We recommend that you consider factors such as client reviews, overall cost, and experience in the field when you are looking for someone to serve in this capacity. By conducting an initial consultation with your possible executor, you can begin to form a trusted relationship with that person as you discern whether he or she is the right fit for you.

Guardianship FAQs

Published on: April 7, 2024 | By Thomas W. McCulloch

Sometimes, during an individual’s court proceedings, the court will decide that the litigant needs a guardian to look out for his or her best interest. When this happens, the court makes a finding on the record that the individual at issue is incapacitated, finds a guardian to care for that person, and appoints the guardian formally to establish the legal relationship between the two people. On today’s blog, we cover some frequently asked questions about guardianship in Texas, so you can be aware of what happens when a guardian is involved in state court proceedings.

What Kinds of Guardianship Does the Court Consider?

There are four main types of guardians that the court can appoint: the guardian of the person (full or limited); the guardian of the estate (full or limited); the guardian of the person and estate; and temporary guardianship. Each type is relatively self-explanatory – the guardian will either look out for the person’s personal care and treatment (in a complete or partial capacity) and/or the person’s financial matters (again, in a complete or partial capacity). For temporary guardianship, the court determines that there is an emergency situation necessitating a guardianship, which will remain in place until the court says otherwise.

When is a Litigant “Incapacitated?”

In Texas, the word “incapacitated” refers to either a person under the age of 18 or to, according to the statute, “an adult who, because of a physical or mental condition, is substantially unable to: (A) provide food, clothing, or shelter for himself or herself; (B) care for the person’s own physical health; or (C) manage the person’s own financial affairs.” Courts will not take this analysis lightly and will generally only consider guardianship when absolutely necessary.

When Should You Start Preparing to Apply for Medicaid in Texas?

Published on: April 7, 2024 | By David W. Miller

In Texas, the state provides Medicaid to those considered “low income” that meet certain threshold requirements. To qualify, you must be a low-income resident of Texas in need of heath care, and you must either be: pregnant, responsible for the care of a child, blind, disabled or caring for a person who is disabled, or 65 years or older. If you meet the requirements, you can submit your application, wait for the government to approve it, and eventually receive the state-sponsored benefit.

If you know that you will likely qualify for Medicaid at the age of 65, you can start to prepare for the process of submitting your application. This process will include filing out an online (or phone) form in which you answer questions about your household, your current income, and your assets. The government will be looking at your financial profile to ensure that you meet its requirements to receive Medicaid before it approves your application.

You might need several documents to supplement your application: these documents may include proof of your identity, a social security card, proof of citizenship, and documents proving where you live (many times, these documents end up overlapping with each other). You might also have expenses such as child support or loan payments that you will need to address. You should also be prepared to submit documents regarding your earnings, assets, medical expenses, housing expenses, and any current health insurance plan that you are using.

How to Ensure Your Wishes Are Honored After You Are Gone

Published on: March 30, 2024 | By Thomas W. McCulloch

How to Ensure Your Wishes Are Honored After You Are Gone

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.

Should You Create Your Own Estate Plan with Online Resources?

Published on: March 30, 2024 | By David W. Miller

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.

Choosing a Houston Estate Planning Attorney: What You Need to Know

Published on: March 21, 2024 | By Thomas W. McCulloch

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.

When is it Time to Update Your Estate Plan?

Published on: March 21, 2024 | By David W. Miller

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.

The Basics on Texas Trusts

Published on: March 13, 2024 | By Thomas W. McCulloch

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.

Types of Power of Attorney in Texas

Published on: March 13, 2024 | By Thomas W. McCulloch

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.