Houston Estate Planning and Elder Law Attorney Blog

What Are Conservatorships in Texas and Why You Should Avoid Them

Published on: September 20, 2022 | By Thomas W. McCulloch

Conservatorships have been thrust into the public spotlight in recent years because of one high-profile legal battle involving pop star Britney Spears. While many people may now understand the broad strokes of the legal mechanism because of this highly watched and followed case, it can be a complex tool best explained by a knowledgeable estate planning attorney. One thing the public understands well, though, is that conservatorships and guardianships can provide an easy route for fraud and abuse.

Conservatorship Basics

In Texas, a conservatorship is also called a guardianship. A court can appoint a conservator or guardian to make decisions on behalf of an individual. The person under guardianship is then deprived of making many everyday decisions on their own behalf.

To come under a conservatorship, a court must determine a person cannot make legal, financial, or medical decisions on their own behalf. This can encompass a wide range of possibilities, from mental health issues to dementia or intellectual or physical disabilities. Aging individuals can also come under conservatorship.

5 Reasons Beneficiary Designations Don’t Work Well for Estate Planning

Published on: September 20, 2022 | By David W. Miller

It’s no question that estate planning can seem daunting. Beyond your last will and testament, there are a bevy of other documents that may seem unnecessary, duplicative, or just plain overwhelming. You may think making beneficiary designations, or forms that allow you to transfer assets directly to individuals without dealing with your will and the probate process, simplifies the entire endeavor. Unfortunately, there are a number of pitfalls that can happen when individuals simply settle for beneficiary designations without utilizing other estate planning tools with an experienced attorney.

1.) Your Beneficiary May Pass Away

Although this may seem obvious, many people do not consider that their beneficiary may pass away. With multiple assets, you may forget to change your designation in the event of your beneficiary’s death, leaving your asset stranded. You may be incapacitated in some way, which could render you unable to update your designations. Without proper mechanisms in place, you would be left without an avenue for passing on your assets.

2.) Your Beneficiary May Not Follow Your Wishes

You may name a beneficiary with the idea that they equitably share the asset or account you’ve left to them with other individuals, such as among siblings or children. Unfortunately, this may not always be the case. Proper planning can ensure your wishes are carried out exactly as you specify, without leaving it up to chance.

The Importance of Having a Business Succession Plan

Published on: September 10, 2022 | By Thomas W. McCulloch

For many business owners, the future of your business and life’s work is at the forefront of your mind. Business succession planning should also be at the forefront of your estate planning. Beyond the complexities of regular estate planning, business succession planning must carefully consider unique tax implications and asset protection strategies. In addition, choosing the right person to control your business—or the right plan for sale or closure—is imperative in ensuring your preferences and wishes are carried out.

Who Will Control Your Business?

When it comes to who will control your business, any business owner knows the right leader is crucial to the success of the company. If you can no longer run your business, you have several options.

First, you could transfer ownership to someone you’ve selected yourself. While many owners believe this will ensure their life’s work is carried out with their preferences in mind, owners should carefully consider who they should pass the business to and what training will need to be done. In addition, there are tax liability issues at play in the transfer of a business.

Estate Planning Considerations for Cat and Dog Owners

Published on: September 10, 2022 | By David W. Miller

Individuals thinking about estate planning may already be considering their spouses, children, and even important charities and foundations that are meaningful to them. It is important for planners to also consider implementing estate plans for their beloved cats and dogs. While you cannot leave money to your pet in your will, there are other tools to ensure your pets are cared for in your absence.

Choosing a Caretaker

In many cases, it may be clear and undisputed who your pet’s caretaker may be. You may think just telling your executor who will care for your cat or dog will be enough. But in the unfortunate event a dispute arises or your caretaker can no longer accept the responsibility, a formal arrangement in your will can ensure your pet is properly cared for. If you do not have a trusted loved one, many arrangements exist that will ensure your pet has a safe caretaker, such as SPCA programs, private pet sanctuaries, and veterinary school programs.

Pet Trusts

Some estates will leave a sum of money to their chosen caretaker to cover expenses related to animal care. Others, however, may choose to create a pet trust. Pet trusts are recognized in every state, including Texas, as legal estate planning instruments. Similar to other types of trusts, the trust creator places funds or assets into the trust for the benefit of the pet. The pet owner will name a trustee and even a successor trustee charged with managing these funds. Acceptable uses include veterinary and medical costs, food and care expenses, grooming needs, and even end of life plans for the pet, such as burial or cremation. Individuals creating pet trusts should clearly describe and identify their pet in the trust to avoid potential abuse.

Common Estate Planning Mistakes

Published on: August 31, 2022 | By Thomas W. McCulloch

End-of-life planning is an emotionally challenging process. Without the aid of an experienced estate planning attorney, you may fall into some common pitfalls without realizing their harm.

Thinking you don’t have an estate

Some think only the very wealthy have an estate, but this is untrue. Everyone has an estate, and everyone’s estate plans will differ based on their individual needs. Common elements of an estate plan can range from a person’s post-death plans for their body to plans for their home to their vehicle. Even digital assets need to be included in a comprehensive estate plan.

The Difference Between Medicare and Medicaid

Published on: August 31, 2022 | By David W. Miller

Medicare and Medicaid have similar names but are two completely separate government health insurance programs. Understanding the difference can help you and your family plan for aging and retirement.

What is Medicare?

Medicare is a program administered by the federal government—the Centers for Medicare & Medicaid services—that is essentially available to anyone, regardless of income. If you are over 65 years of age or are younger and have a specific disability, you may qualify for Medicare. People covered under Medicare pay into a trust from which medical bills are paid. Most long-term care costs are not covered under Medicare, making it difficult for aging individuals and their families to pay for care facilities or long-term rehabilitation.

What is Medicaid?

Unlike Medicare, Medicaid is administered by individual states, such as Texas. It is catered to serve low-income people at any age, and also covers the costs of long-term care in nursing home facilities. In Texas, Medicaid is extremely complex and can be difficult to navigate. Medicaid applicants must either have a disability, be caring for a disabled child, or have a monthly income under a limit set by the government each year. Medicaid applicants must also have less than $2,000 in certain assets, which can exclude primary residences, vehicles, and some personal property. The government will look at the most recent five years of financial statements to ensure an applicant’s eligibility, making it difficult for applicants to transfer assets in anticipation of filing for Medicaid benefits if they wait until the last minute.

Community Property’s Impact on Texas Probate

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

If you’re considering your end-of-life plans and want to ensure your family’s safety and comfort, you may already know and understand the need for a last will and testament. Understanding what happens after the will is drafted, however, is crucial to best position your estate for a seamless and hassle-free probate process for your loved ones. This includes understanding the legal classification of your assets.

Probate, or the process of distributing a person’s assets after death, can be a lengthy and complicated process. Through this process, the executor of the estate as named by a will must file an application for probate in the relevant county. Then the court will post notice of that application, opening up the process for contesting a will. Even if there is no contest to the will, a court must still hold a hearing to ensure the validity of the will and appoint the executor. Once the executor is appointed, the process continues—the executor must locate and distribute all assets, notify creditors, and resolve any disputes.

Some assets, however, are not so clearly defined. Even if you have employed a Texas estate planning attorney to minimize the assets that must go through probate, there will likely be assets remaining that must go through this process. These assets may include community property.

Protecting Yourself or Your Loved One from Elder Abuse

Published on: August 21, 2022 | By David W. Miller

health savings accounts in estate planning

Medical emergencies, especially among aging individuals, can result in long-term rehabilitation and financial distress. Planning ahead for these emergencies is crucial, not only to preserve your assets and your independence but also to protect yourself from unscrupulous practices.

According to a recent article, a woman has filed a lawsuit alleging extensive financial fraud and abuse against a long-term elder care and rehabilitation facility. The woman, who lived alone and independently, entered the facility to recover from numerous medical issues after hospitalization. She alleges employees of the care facility repeatedly suggested that she get rid of her assets and live the remainder of her days in the nursing home facility, which she declined and insisted she did not wish to do.

After this refusal, she was placed on a cocktail of medications that put her under a fog, leading to hallucinations and confusion. It was then that she was coerced into signing a durable power of attorney agreement handing over control of all of her financial decisions to an officer of the care facility, whom the woman had never actually met. This officer kept her from seeing her family and eventually sold all of her assets, including her car, and listed her home on the market.

The Costs of Long-Term Care are Rising

Published on: August 17, 2022 | By Thomas W. McCulloch

According to a recent report, long-term care costs are rising. Genworth, a provider of long-term care insurance, surveyed 2017-2018 inflation rates in long-term care categories and discovered that for some categories, costs were rising at up to two to three times the rate of inflation. And with inflation rising even higher in 2022 than it did five years ago, careful planning for you and your loved ones’ futures is all the more critical.

At just a 3% projected inflation rate, Houston-area costs for in-home elder care services could rise to over $8,000 per month by 2041, in just twenty years. A private room in a nursing home facility could be nearly $170,000 annually. Even adult day care or assisted living facilities, which are lower-cost options, could rise to $23,826 and $92,003 annually, respectively. This is without considering that inflation in some of these categories could be higher than an average of 3%. Proper planning with an experienced attorney is crucial to ensure these costs are carefully considered and planned for.

Why are Costs Rising?

Planning for Incapacity in Texas

Published on: August 17, 2022 | By David W. Miller

Many people know that planning for retirement and planning for the allocation of their estate are two inevitable tasks. Planning for incapacity, or the inability to perform various legal and medical functions, however, is just a possibility, not an inevitability. However, having a plan in place in the event you are incapacitated can help protect your assets and your medical wishes just in case the future does not go to plan. An advance directive is a written statement of your wishes regarding your medical treatment and are legally binding documents.

The state of Texas recognizes five common types of advance directives: directive to physicians, family, and surrogates; medical power of attorney; out-of-hospital do not resuscitate; durable power of attorney, and declaration for mental health treatment. An experienced Texas estate planning attorney can help you decide which of these documents best meets your incapacity planning needs.

Directive to Physicians and Family

A directive to physicians, family, or surrogates is also known as a living will. This directive will state your wishes regarding life-sustaining procedures or measures in the event you have a terminal condition and your death becomes imminent.