Houston Estate Planning and Elder Law Attorney Blog

Broker Steals from Client with Dementia

Published on: January 11, 2023 | By David W. Miller

Unfortunately, elder abuse is all too common. But the abuse is not only physical or psychological but also financial: seemingly legitimate brokers can manipulate and steal from aging communities, especially those with limited competence or memory issues. In 2019, $25 million was lost from individuals over 60 due to investment fraud. One recent instance exposes many of the problems with elder financial abuse.

In one instance, a former stockbroker for the firm LPL Financial was charged with multiple counts of exploiting and stealing from an elderly person. The losses totaled nearly $1.3 million from the client, who suffered from dementia and memory loss. The broker advised the client to move funds from her trust to her bank account to fund investments in one of the broker’s businesses, allegedly to make investments in real estate investment trusts. This happened over the course of approximately eight years. Instead of making the investments, the broker moved the funds from the investment fund’s bank accounts to his personal accounts, where he used the money to pay off personal debts and other expenses.

The broker exploited his personal relationship with his client and her late husband. After her husband passed, he “positioned himself as a friend and confidant” to the client, according to the SEC, and began to assert control and influence over the client’s affairs.

SECURE Act 2.0 Changes Required Minimum Distribution Rules

Published on: December 30, 2022 | By McCulloch & Miller, PLLC

SECURE Act 2.0 Changes Required Minimum Distribution Rules

Planning for retirement can already be daunting. IRAs, 401(k)s, 403(b)s, and TSPs can sound like an alphabet soup of hoops to jump through and requirements to know. On top of general planning for retirement, Congress occasionally will enact legislation that changes the taxation scheme for various retirement accounts and tools. While these changes can often be beneficial, knowing how best to navigate a new legislative environment can be half of the battle to planning for retirement in a savvy way.

For example, the SECURE 2.0 Act will change the required minimum distribution rules. Required minimum distribution is the amount of money a person must begin withdrawing from certain types of employer-sponsored retirement plans or traditional IRAs at retirement age. These required distributions can impact how you may plan for retirement, including avoiding hefty tax penalties or certain types of accounts. Talking to an attorney well-versed in estate and retirement planning can help you understand how these rules change and how they may or may not impact your plans. Furthermore, each of these rules has different implementation and start dates, and the impact of these changes can change depending on your birth year. Understanding these nuances is key to taking full advantage of the changes, which were designed to make retirement saving easier for people in the United States.

SECURE 2.0’s Changes

Under SECURE 2.0, the required age for federal employees to begin taking their required minimum distributions is now later than it was under SECURE 1.0 and before the passage of SECURE 1.0. The age has generally moved from 70.5 to 73 in 2023. In 2033, the age will be 75.

Why a Will and a Trust Do Not Make a Complete Estate Plan

Published on: December 27, 2022 | By David W. Miller

Horror stories abound of individuals with plenty of assets passing on without a will, throwing their loved ones into chaos and probate drama. You may have heard of these stories and made sure to establish a secure will. You may have even gone a step further and placed some assets into a trust for your heirs so those assets can avoid probate. Unfortunately, a will and a trust do not make a complete estate plan. Here are 5 other things to consider when evaluating the completeness of your estate plan.

Regularly Update Your Documents

First, even a will and a trust won’t do what you want them to if you do not regularly evaluate and update them. Changes to your financial or personal circumstances should prompt an update. For example, a divorce, marriage, death of a spouse or beneficiary, or a loss of a job or large inheritance could all require changes to your estate plans.

Include Health Care Designations

If you have a will and a trust, you still may wish to put specific documents in place that designate your healthcare wishes in the event you become incapacitated. These documents are called advance directives. A medical power of attorney grants a person of your choosing the right to make your medical decisions for you, while a directive to physicians will outline wishes for your care in advance.

Changes to Your Estate Plan After a Divorce

Published on: December 27, 2022 | By David W. Miller

A divorce is no doubt a challenging time in the lives of all who go through one. Even for the amicable splits, the time spent doing paperwork and discussing the best division of assets can be draining. Unfortunately, the issuance of a divorce decree or separation agreement is not the end of the journey. You will need to make changes to your estate plan to reflect your new circumstances and avoid regret down the road.

Do not think that changing your will is the only update you will need to make. After a divorce, any document may include your former spouse as a beneficiary. Pay special attention to your will, of course, but also consider your living trust and power of attorney documents. Also, be sure to update any life insurance policies or transfer-on-death provisions as well.

Updating Your Documents

If you’ve been through a divorce, consider revising your old will by executing a new one and destroying the old one. This will work to revoke the old will. Provisions that may need rewriting include arranging for any property previously designated for your spouse to go to an alternate beneficiary, updating the executor of your estate if it was previously your spouse, and designating a guardian of your children. Even though in all likelihood your spouse will be awarded custody of your children in the event of your death, if your wishes are for your children to live with another guardian, you should still include that language in your will.

Modifications to Your Estate Plan When You Learn You’re Pregnant

Published on: December 21, 2022 | By Thomas W. McCulloch

If you are expecting a new addition to your family, congratulations! This can be an exciting and exhilarating time with plenty of changes, but the changes do not stop at diapers. Secure your child’s future by updating your estate plans across the board. In addition to updating your beneficiaries, you will want to do the difficult work of establishing a guardian for your child. You may also want to consider establishing a trust to begin building wealth for your family and planning for their future alongside yours.

In any event, do not stress. In this exciting time, know that estate planning attorneys are there to help you make all the necessary plans for you, your children, and your family. An experienced attorney will leave no stone unturned in ensuring you have prepared for the care and financial wellness of your children, no matter your individual circumstances.

Updating Your Plans for Baby

The first step in preparing your financial future to include your child is addressing your will. Your will is crucial not only because it designates the heirs to your property and assets, which now will include more than just your partner and family, but also because it designates a guardian for your child in the unfortunate event that something happens to you and your partner.

Do Medicare and Medicaid Cover Psychiatric Services for Children?

Published on: December 21, 2022 | By McCulloch & Miller, PLLC

Statistics indicate one of every four children will have a childhood mental illness. And in Texas, in 2020, over 500,000 children were diagnosed with anxiety or depression. If you have a child or teen with mental health needs, you are not alone. But many families fail to consider mental health needs when planning for public benefits.

Public benefits programs like Medicare and Medicaid cover mental health services in addition to more traditional health care. Families that make over a certain income level may think they do not qualify for these programs. But these programs often increase access to health care and include benefits and programs not available under traditional employer-provided insurance, so it’s worth determining if your family qualifies via benefits planning or other income levels. In addition, Texas has programs for children of families that do not qualify for Medicaid. There are certain estate planning tools that can help aid in Medicaid qualification, such as Miller Trusts or lady bird deeds.

Medicare Coverage

Medicare is a federal health care program administered by the federal government and is available to anyone regardless of income, so long as they are over 65 years of age or have a specific disability. Medicare covers a wide range of mental health services but does not cover most long-term care costs. And Medicare patients may have to pay deductibles, copays, and other out of pocket costs. Medicare Part B covers outpatient mental health services that can include partial hospitalization, depression screenings, diagnostic testing, individual or group psychotherapy, and other medication and counseling needs. Medicare Part A covers inpatient mental health care at a regular or psychiatric hospital.

Can You Change Your Mind After You Transfer Assets in a Trust?

Published on: November 22, 2022 | By Thomas W. McCulloch

A trust is a legal entity set up during a beneficiary’s lifetime by a third party to ensure assets are spent in accordance with the person setting up the trust’s wishes. Trusts can also avoid certain tax consequences and the headache of the probate process. If you have set up a trust, you may be wondering if the terms of that trust are modifiable after it’s been signed on the dotted line. Changes in circumstance, such as a changed relationship with a beneficiary or a change in your financial situation, may spark reasonable questions about any trusts you have set up.

The short answer: it depends. If your trust is set up as a revocable trust, you can change the terms at any time. If your trust is set up as an irrevocable trust, it can’t be modified unless any and all relevant beneficiaries provide consent. There are different benefits to each type of trust, and different circumstances may indicate the need for one, the other, or a combination.

What is a Revocable Trust?

A revocable trust is also known as a living trust. The person who created the trust, or grantor, can change the terms of the trust at any time. Changed terms include changed requirements on asset management requirements and the removal or addition of beneficiaries, but the exact rules vary by state.

Who Makes Your Health Care Decisions if You Can’t?

Published on: November 22, 2022 | By David W. Miller

In the event of an unfortunate health emergency, you may become incapacitated. If you are incapacitated, you will not be able to make the decisions needed to consent to and direct your own medical care. The law provides for a plan in this unfortunate event. But the law’s provisions may not be sufficient to ensure your plans are executed according to your wishes. Advance directives can help.

If you do not have any advance directives in place, someone may still be available to make health care decisions for you. If you are incapacitated in Texas, the following can still make decisions and consent to treatment for you: your spouse, your adult child or children (either a majority or one designated to make such choices by your other children), your parents, a person you identified to make decisions for you before you lost capacity, or a nearest living family member or clergy member. The priority goes in order from first to last. If relevant parties disagree, the judge of a Texas probate court will make that decision.

Types of Advance Directives

If this priority-ranked system sounds stressful and you’re worried your wishes will not be accurately carried out, consider putting advance directives in place. Some advance directives allow you to outline your care without the need to name a third party to make decisions for you. These include directives to physicians and family or surrogates, or living wills, out-of-hospital do-not-resuscitates (DNRs), and declarations for mental health treatment. In Texas, living wills lay out your requirements for life-sustaining measures in the event you have a condition certified by two physicians as terminal. DNRs give emergency medical professionals, who cannot follow living wills, instructions not to resuscitate you. And declarations for mental health treatment help you make advance decisions about the type of mental health treatment you would like to receive in a mental health emergency, such as medication and therapy, in the event a court declares you incapacitated.

McCulloch & Miller Announces the New Estate Planning Maintenance Plan

Published on: November 15, 2022 | By McCulloch & Miller, PLLC

McCulloch & Miller Announces the New Estate Planning Maintenance Plan

Estate planning is an integral part of life for all Americans, regardless of your age or the amount of financial assets you’ve accumulated thus far in your life. However, one of the most common misconceptions about estate planning is that once your estate planning documents have been drafted, you never need to revisit them. At McCulloch & Miller, we recommend all of our clients at least annually review their estate plan with an attorney to ensure that it continues to meet your needs, goals and current situation. Moreover, it is essential to take a look at your estate planning documents whenever you experience a major change in your life. It is for this reason that we’ve developed the Estate Planning Maintenance Plan.

What Is the Estate Planning Maintenance Plan?

The idea behind an estate plan is to create documents that will serve your interests regardless of what the future holds. However, over time, the circumstances of your life will change. The Estate Planning Maintenance Plan is a new program McCulloch & Miller, PLLC has rolled out to help current clients keep on top of their estate planning needs. The plan was designed for our existing clients in hopes of offering a cost-effective way for them to make sure their estate plan continues to serve them as well as it did when it was first created.

For the low annual cost of $500 (for individuals) or $750 (for couples), you will receive the following:

An annual consultation for an estate plan review;
Access to exclusive estate planning maintenance workshops;
Unlimited changes to durable powers of attorney [link to Power of Attorney Documents page];
Unlimited changes to medical powers of attorney; and
Timely updates on all relevant changes to the law that may impact your estate plan.

The Two Types of Special Needs Trusts in Texas

Published on: November 15, 2022 | By David W. Miller

Loved ones, family members, and parents of special needs individuals know they often need a unique approach in helping care for the special needs child or adult in their life. This approach is often augmented by help from government benefits established to make life easier for people with special needs, such as Medicaid and Social Security. These programs, however, become unavailable to individuals above certain asset thresholds.

To help preserve access to this much-needed medical and living expense coverage granted by the federal government, caretakers and financial providers for special needs individuals may wish to set up special needs trusts. In a special needs trust, a grantor names a trustee to administer the trust and a beneficiary, who is the special needs individual. Funds are distributed from the trust without impacting income eligibility for these government programs. Special needs trusts must not be used for living expenses or medical expenses already covered by Medicaid or Social Security, but can be used for supplemental expenses, such as job training or educational program tuition, and even luxury expenses and non-essential costs like vacations, hobbies, or home furnishings. The beneficiary never has direct access to the trust.

There are two main types of special needs trusts: first-party and third-party. The following summarizes the key differences between the two types of trusts. An estate planning attorney can help determine which type, if any, of these two trusts makes the most sense for your family.