Houston Estate Planning and Elder Law Attorney Blog

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.

Should You Establish a Charitable Remainder Trust?

Published on: November 7, 2022 | By Thomas W. McCulloch

woman retirement risks and estate planning

Individuals may wish to put some of their hard-earned assets toward charitable causes or organizations throughout and at the end of their lives. While charitable gifts and lump sum donations may seem generous, they can sometimes incur unexpected tax benefits that require caution. One way to charitably donate in a tax-savvy way is through establishing a charitable remainder trust. This can be especially wise for appreciable assets or sums large enough to exceed gift tax limitations.

What is a Charitable Remainder Trust?

Charitable remainder trusts allow people to donate to charitable causes while also generating income for themselves or another beneficiary in the meantime. First, the person who wishes to donate will place the assets—which can include cash and equity, real estate, and even business interests— into the charitable remainder trust. The assets will be paid to a beneficiary other than the charity, such as you or other named individuals like family members, for a certain period of time. This period of time is up to 20 years or the lifetime of the noncharitable beneficiaries. After that time frame, the remaining assets are transferred to one or multiple charitable causes or organizations. This transfer avoids the headache of probate.

There are two types of charitable remainder trusts: annuity trusts and unitrusts. An annuity trust will pay you or your other noncharitable beneficiary the same dollar amount of your choosing each year, regardless of assets or investments coming into the trust. A unitrust will pay a variable amount that is a percentage of the fair market value of the trust and will be recalculated each year.

Navigating and Avoiding Will Contests in Texas

Published on: November 7, 2022 | By David W. Miller

Even the most diligent of individuals may not anticipate a contest to their will’s validity when estate planning. Planning for your own potential incompetence or fights about your intention between family members can be upsetting and may even seem far-fetched. Unfortunately, planning for the worst-case scenario can help avoid major headaches in the probate process.

Why Can a Will Be Contested?

Understanding the ways a will can be contested can help in the planning process. Common objections can be, as noted above, that the will maker (or testator) was incompetent or was suffering a delusion. This can encompass a wide variety of circumstances, including dementia and Alzheimer’s disease, stroke, drug or alcohol use, an array of mental disorders such as schizophrenia and depression, and some physical ailments that implicate capacity.

In addition, objectors can claim undue influence or other outside factors like fraud and coercion or duress or mistake. Courts will consider all relevant factors when determining if undue influence is present, including circumstantial evidence that does not directly prove the fraudulent behavior but, taken as part of the whole story, indicate a problem existed.

How Often Should You Update Your Estate Plan?

Published on: October 27, 2022 | By Thomas W. McCulloch

A common pitfall for many individuals and families in estate planning is thinking that the work is done when the original plan is created. Changes in finances, life circumstances, health, or even the economy and the law mean that estate plans should be updated and reviewed regularly. Failure to do so can result in unpleasant surprises when the time comes, such as assets that aren’t covered, a hefty tax bill, or beneficiaries or a will that doesn’t comport with your wishes.

For many individuals, this review occurs annually or even more often. People who review their financials quarterly, semi-annually, or annually should also review their estate plans while their financial picture is in front of them. A natural time to do this is while preparing and filing your annual taxes.

Every two to three years, and at minimum every five years, have an attorney formally review your estate plan. An estate planning attorney can consider any changes to your circumstances and determine if your plan still fits your needs. Your lawyer will also know if any changes in the law will impact your plans or your assets and recommend updates to make and ways to proceed. For example, changes to tax laws may necessitate a change in strategy to protect your assets for your future beneficiaries.

Asset Protection: Who Are You Protecting Your Assets From?

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

Individuals and families with up-to-date and comprehensive estate plans may think their work is done in protecting their assets. But many types of assets could use additional protection before death or incapacitation, which requires a more holistic strategy than many estate plans cover. And some individuals may need asset protection plans more than others, while everyone should have an estate plan in place. Asset protection strategies can protect your wealth from seizure or other losses. Asset protection and estate plans often coexist, but both sides need individual consideration and attention.

Why Do I Need Protection?

You may think your assets are relatively secure, but this can be a mistake. Even the most financially stable of individuals may fall into circumstances that lead to creditors at the door. And high net worth individuals or individuals in high-risk professions such as doctors and lawyers may be targets for lawsuits and scam artists, which can result in high damages awards or unwitting asset transfers without strategies in place to mitigate these losses and shield assets from these claims. Spouses and in-laws can also serve as surprising asset predators, especially if marriages dissolve and tensions become hostile, even if planning for that unfortunate possibility seems difficult to imagine. Finally, hefty taxes can be imposed on certain asset types by the government, which can be protected by certain trusts and a good tax strategy.