Category: Living Will

Houston Will Lawyers: Estate Planning Documents Everyone Needs Now

We have all heard stories of families that found themselves in a tailspin because a loved one passed away or became incapacitated without a proper estate plan. No matter what your age, you could really leave your family with a mess to clean up during an already very emotional time if you get sick or die without the right legal documents in place. It is important to help make things as easy as possible for the people you love by having your affairs in order. Here are five documents to consider creating right away.

  1. Last Will and Testament and/or Living Trust

A will is a document used to leave instructions about what should happen to your property after you die. In addition, you can use a will to name guardians for your minor children and even your pets. Depending on your situation, a Living Trust may add another layer of protection and control to your planning while allowing your family to avoid the potential costly (and slow!) probate process after you die. Your loved ones will be relieved to know that your final affairs will be administered smoothly using these documents and that they are properly carrying out your wishes.

  1. Durable power of attorney

A power of attorney allows you to choose someone to act on your behalf financially and legally in case you cannot make decisions. If you do not designate someone, your loved one’s hands could be tied if you are incapacitated. Many people put off creating a durable power of attorney because they think they are relinquishing control. This is not necessarily the case, as you can create a power of attorney that only takes effect if and when you are incapacitated if this is an issue for you.

  1. A medical power of attorney or living will

This document is different from the power of attorney described above. The medical power of attorney allows someone to make medical decisions for you if you are incapacitated or otherwise unable to communicate to medical professionals. A living will also allows you to explain in advance what type of care you do or do not want in all types of medical situations.

  1. List of important documents

Make a list directing your family on how to find all of your financial and legal documents. The list should include life insurance policies, annuities, pension or retirement accounts, bank accounts, divorce records, birth/adoption certificates, real estate deeds, stocks, bonds, and mutual funds. If possible, include a list of bills and accounts so that someone can settle and close them.

If you do not have these documents in place, call our Houston Will and Trust Lawyers today to find out how easy and quick the process can be. Not only will your family benefit from your thoughtfulness, but you will be able to make your own decisions instead of leaving them to the courts. Schedule a consultation by simply calling 281-218-0880.

Saving the Home with Long-Term Health Care Demands

The largest asset most people have is their family home. If a senior is in a situation where his or her long-term care insurance is exhausted and the other assets are used to pay for care, how does one protect the home from being taken?

Long-term care insurance is important; however, it’s also critical to review and revise your financial and estate plans regularly as your situation changes, according to NJ 101.5’s article “Medicaid and protecting your home.” 10-27-16

Speak with an experienced estate planning or elder care attorney to plan for your individual circumstances. You should also have your will, general power of attorney, advance health care directive or other estate planning documents reviewed or drafted.

As far as how Medicaid works, it has both income and asset limitations that require a recipient to become impoverished to qualify. For Medicaid eligibility, your primary residence is exempt provided you or your spouse live in the house or intend to return to the house to reside. That said, Medicaid will have an automatic lien on any interest in a residence in your name equal to the amount of Medicaid funds you receive. The program will execute on that lien when the home sells or upon death—unless the recipient’s spouse remains an owner of the residence.

To keep people from giving away their property to qualify for Medicaid, there’s a penalty for the transfer within five years of applying for Medicaid. The penalty is calculated by dividing the value of the assets transferred by the state’s Medicaid average monthly cost of a nursing home. The penalty period starts only after an individual enters a nursing home and would otherwise be eligible for Medicaid, not at the time of the transfer. During that time, Medicaid won’t pay for the nursing home. Private funds have to be used.

There are exceptions for undue hardship but these are rare. One exception is for the transfer of a residence to a child who has lived in the home for at least two years before the applicant enters a care facility and who during that period provided the applicant with care and services that enabled that person to live at home. In that situation, the transfer of the house to the child doesn’t result in a penalty. The house won’t be subject to a Medicaid lien.

Similarly, gifts and sales that are less than fair market value within five years of applying for Medicaid are subject to a penalty. But before a transfer is made, there are also income tax considerations which may significantly impact both the transferee and the applicant. If there is no mortgage, another option is a reverse mortgage, which lets you withdraw the equity in the property with the loan being paid back at death or once the property is permanently vacated.

Medicaid is a complex and constantly changing area, so talk with an experienced elder law or Medicaid planning attorney who is current on all the rules that may impact your decisions.

Reference: NJ 101.5 (September 12, 2016) “Medicaid and protecting your home”

Come On, Do I Really Need a Will?

The answer to that question has always been an unequivocal “yes”—especially when there’s a spouse, children or stepchildren. However, there are some financial advisers that now say many Americans might not need a will. Forbes’ article, “Do You Really Need A Will?” says that a simpler life may mean you will need a less complex estate plan. However, few people’s lives are that simple. 10-19-2016

If you have minor children, you need a will to designate guardians for them. Also, a will or a trust will let you name someone to watch over assets for a disabled or elderly family member or a relative who may not be good with handling money.

Whether you have prized possessions or you want to bequeath some of your estate to the local animal rescue, a will is essential.

The state in which you live can make a big difference. In community property states, your surviving spouse will only inherit all your community property if all your children are also the children of that spouse. Otherwise, your one-half interest in your community estate will pass to your children. If there is any kind of animosity or resentment, they could make your spouse sell the house and send him or her packing because the kids own half the house.

Without a will, a pet can wind up in a shelter after you die if no one takes responsibility for it. A will can name a responsible person and make for a smoother transition for the animal.

A will can also help elderly parents avoid losing government benefits if you predecease them. If they are beneficiaries of your life insurance policy, a large payout may halt their government benefits unless you write a specific provision in your will.

Reference: Forbes (August 31, 2016) “Do You Really Need A Will?”

A Close Look at the Costs for End-of-Life Care

A recent study showed that people in the U.S. fear developing Alzheimer's disease more than any other major life-threatening disease—including cancer, stroke, heart disease and diabetes. It also found if diagnosed with the disease, most have deep concerns about their inability to care for themselves. Burdening others by losing memory of life and loved ones was the second greatest concern, according to the MarketWatch article, “What to know about Alzheimer’s and retirement planning.” 8-29-2016

A survey of about 1,000 adults by Harris Interactive showed that the percentage of people who fear getting Alzheimer's has risen much more since 2006 compared to other diseases. This means it’s critical to properly plan for your retirement years early in case you or a loved one becomes afflicted. Take a look at the breakdown in terms of dollars for care between three common diseases:

  • Cancer: $173,400
  • Heart disease: $175,100
  • Dementia: $278,000

These potential medical expenses must be considered in retirement and estate planning. Some of it can be paid for by insurance, Medicare and Medicaid. However, a large amount needs to be paid out of pocket by the family. In most instances, the total cost of care by family caregivers isn’t included in estimates because much of that time is just "helping out," and there’s no cost figure against this. Similarly, there’s no estimate on the amount of lost income family-care providers would have earned if they weren’t involved in the care giving.

Financial planning often gets delayed, but there are many tasks that should be done to make things easier and to avoid complications down the road. Identify family members who should be included in financial plans, like those who can help with routine financial responsibilities. You also should identify the projected costs of care when it comes to Alzheimer's and dementia because those costs are so high. Review any available government benefits, along with Medicare and long-term care policies.

Reference: MarketWatch (July 7, 2016) “What to know about Alzheimer’s and retirement planning”