The Livens Law Firm

Dallas Estate Planning Law Blog

Those with higher income levels concerned with long-term care

Health care costs are skyrocketing for most Texas residents and others around the country. Those with reputable insurance plans still often face outrageous premiums and high deductibles. Unfortunately, the likelihood of a catastrophic illness or injury increases as the population gets older. The long-term care required for these medical situations can be a personal and financial burden for most, even for those in a higher income bracket.

A national industry survey recently showed that nearly half of the adults over the age of 50 who had over $150,000 in household income were concerned that they would be a burden to their families one day. Of this same group, just slightly over a quarter of them had any type of long-term care insurance policy in place. Yet, over 70 percent of them hoped that their families would take care of them should the need arise.

A will is a good place to start when estate planning

Most Texas residents and others living around the country don't often think about the time when they will no longer be around. While such thoughts are not pleasant, some individuals do consider how their loved ones will be provided for or the manner in which their assets will be distributed. Estate planning can be a complex, but necessary, process. One of the most rudimentary documents in an estate plan is a will.

While comprehensive plans may also include medical directives, trusts or durable powers of attorney, even the  most basic of estate plans have a will. A will is a legal document that identifies the people that will receive assets from an estate as well as how those assets will be divided. Every state has specific laws regulating this division of property. Certainly, the expectation is that anyone who signs a will has the capacity to do so.

Estate planning particularly important to business owners

Small business owners in Texas and elsewhere around the country have a mountain of details to manage. Whether dealing with day-to-day operations or future goals, it is important to consider the long-term viability of the business. Most owners have likely not given much thought to how their companies should be run after they are gone. However, experts strongly suggest that business owners go through the estate planning process to avoid future complications.

Aretha Franklin recently passed away, and it was noted that she died without a will, leaving family members in a quandary about how to disperse her estate. Countless people, whether celebrities or not, have done this through the years. Unfortunately, when someone dies without a will, a court will determine who gets what according to the state's laws of intestacy. This prospect seems unimaginable to the owners of small businesses.

The importance of long-term care plannng

Those Texas residents and others around the country who are nearing retirement age are likely looking forward to leaving the schedules and routines of the working world behind. While most will certainly miss the paycheck they once received, many will rely on retirement funding from corporate plans or personal accounts. Some may have even considered long-term care planning while building their retirement portions. However, those thinking about obtaining long-term care insurance should do so before it becomes cost-prohibitive.

A retiree recently wrote to a personal finance columnist regarding her situation. She and her husband had retirement resources adequate to live on until they were both 120. However, her husband was diagnosed with Parkinson's disease and required full-time care. They did not have long-term care insurance and, because of their ages, they could not afford to get it now.

Importance of having a will, avoiding probate

Aretha Franklin, known as the Queen of Soul, recently passed away at the age of 76. Though her estate was estimated at over $80 million, she reportedly died without a will. Many Texas residents and others all across the country are in the same situation, leaving heirs in uncertainty about their inheritances. Even those with wills in place may find themselves in the process of probate litigation, depending on how an estate plan is established. Experts offer recommendation on how to ensure one's assets are distributed the way they wish.

Like Ms. Franklin, the entertainer Prince also died without a will. Reportedly, none of his $200 million estate has been distributed to date. It is important to communicate how one intends to divide assets in the details of a will. A will can also address guardianship for minor children and designate who the executor for one's estate will be.

Celebrity estate planning errors and how to avoid them

Many Texas residents follow the lives of celebrities online or in the tabloids. Their opulent lifestyles may seem exotic and glamorous. However, certain issues they face are the same as everyone else, albeit on a larger scale. Problems may arise in estate planning for anyone, regardless of the amount of assets. Experts have cited mistakes some celebrities have made in their estate plans, though the errors could occur with anyone.

One of the biggest pitfalls is simply not having an estate plan in place. This certainly was an issue when the entertainer Prince passed away. Though he died in 2016, his estate is still not settled. It is also extremely important to update the beneficiaries of an estate. If not, assets may not go to the persons intended, such as in the cases of Barry White or Heath Ledger.

Consider the need for long-term care plan

Many Texas residents and others around the country have spent a lot of time planning for their retirement years. While some may intend to travel. others might be looking forward to starting a completely different career or devoting time to a hobby. Most people don't like to think about how life might be for them should they become incapacitated and are unable to care for themselves. While not necessarily a welcome topic to discuss, long-term care planning can alleviate many potential concerns in the future.

Financial planners stress the importance of addressing long-term care issues while someone is able to make all the appropriate decisions personally. One key question to consider is the preferred location of the long-term care. While most may hope to remain in their own homes as they grow older, provisions may be made to accommodate that through home health care. Or, if certain conditions are present, a nursing home or assisted-care facility may be warranted. Whichever option is chosen, a long-term care plan will denote how the care will be funded.

Estate planning: Who can amend a trust?

Many Texas residents and others around the country are nearing retirement age or caring for older parents who have already reached that milestone. Effective estate planning can help give individuals peace of mind when considering their financial futures. However, even with an established estate plan in place, questions can still arise. Financial advisers recently discussed how changes to a trust should be made.

In order to make changes to a trust, it has to be amendable. If changes are allowed to the trust, it is important to know who has the authority to do so. Also, are the people permitted to amend the trust able to do so? In some instances, the settlors of the trust may be older and no longer have the mental capacity to make decisions regarding the trust. It may be necessary to seek a professional opinion before making a determination like this.

Handling new found wealth in an inheritance

Those who receive considerable assets from generous loved ones who passed away are usually appreciative but sometimes don't know what to do with their new-found wealth. Such situations can be overwhelming to beneficiaries, and concerns quickly surface about how much will be owed to the IRS. Residents of Texas and elsewhere may have mixed emotions about an inheritance and the tax burdens associated with it.

Beneficiaries are responsible for taxes on any income they receive in an inheritance. There are different tax rules for annuities, investment accounts, IRAs and real estate. Tax burdens are usually minimal or can be reduced depending on the type of assets. It may be in the beneficiary's best interest to have a plan in place and consult with a professional to discuss taxes before taking control of the inheritance.

Plan carefully to cover long-term care costs

Recent statistics show healthy, retired couples over the age of 65 could pay $275,000 for healthcare during their retirement years. Residents of Texas and elsewhere can expect to pay an additional $97,000 a year for long-term care services in a private room in a nursing home. Studies show the cost of long-term care has increased three times faster than inflation since 2004.

The cost of long-term care spending since 1980 has gone from $30 billion to a staggering $225 billion in 2015. Most Americans over age 65 rely on Medicare to cover routine medical care and hospital procedures. However, Medicare does not cover long-term care. Medicaid will pay for a significant portion of expenses, but if a person has more than $2000 in assets, chances are he or she will not qualify.


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