Trust

A Texas Family Avoids an Estate Planning Nightmare

I met with a family from Garland, Texas today.  They were very emotional in telling me a story about a close family friend, Bob, spending his life savings on long-term nursing home care.  Bob has Alzheimer’s and no longer recognizes his family.  They estimated that Bob had spent around $400,000 thus far and that since his condition is worsening, they assumed that the remainder of Bob’s savings would be consumed by his nursing home expenses.

The family wanted to make sure that Bob’s situation doesn’t happen to them.  Their house is paid for and they have an IRA worth around $225,000 along with some savings and some stocks.  They know that they could not be forced to sell the home to pay for their nursing home costs, but that Medicaid can and will lien their home so that they can reimburse themselves for whatever nursing home expenses they pay on their behalves.

We introduced several options available to them and after discussions, we set up a Trust to protect their home and life savings from nursing home expenses. They were surprised how simple and easy it was to protect their assets. One of the key components, though, was their timing. You can’t set up the protections and expect them to work properly if you are on your way to checking-in to the nursing home.  The key is to get your Trust and planning in place while you are still relatively healthy.  It’s not really “planning” if you wait until you are on the doorstep of the nursing home.  In fact, it’s usually too late at that point.  

The family has the peace of mind of knowing that their assets, their home and their belongings are going to wind-up with their children and not go towards paying for nursing home expenses.  Few people have that luxury.  

They were also pleased to find out that since their assets are going to be placed in Trust, they are “doubly” protected from the probate process when they die.  In other words, the Trust avoids losing their assets to the nursing homes AND after they both pass away, their children won’t have to deal with lawyers, judges or courtrooms in order to have access to their parent’s accounts and things.  With their Trust, after the parents both pass away, their children will have access to their assets to pay for funeral expenses and to distribute their belongings and things without the need of lawyers or courts being involved in the process.  Even more peace of mind!

 

You, Me, and Trusts And Red Wagons: The Truth

I helped a man from Plano, Texas today.  He was in our office and wanted to know how Trusts work.  I gave him a quick demonstration using a little red wagon that I keep in our conference room.  The wagon represents the Trust entity itself.   I have several matchbooks that represent a family’s assets (house, car, bank accounts, savings accounts, etc.).  I placed the matchbooks inside the wagon (to represent the re-titling and trust ownership of the assets) and rolled it around the conference room floor to emphasize the mobility and portability of the Trust.  I explained that as long as the assets are inside the trust, they are protected from predators like lawsuits, Probate and the claims of Nursing Homes.  Then I took some of the matchbooks out of the wagon and placed them on the table to demonstrate how the owner maintains control over the assets.  I also indicated, though, that once the matchbooks (assets) were outside of the wagon, they were no longer protected from lawsuits, probate and Nursing Homes.  In the bed of the wagon is a set of instructions that lets everyone know how the trust is to be operated.  I closed my demonstration by explaining to my newest client that trusts aren’t just for the rich anymore.  They are for anyone that wants to protect assets for their families.

That’s a very simple explanation of Trusts.  They can be very complicated but the basics remain the same:  protection and control of family assets.

Don’t Be Fooled by Remarriage and Asset Protection

I helped a Mesquite, Texas couple today with their estate planning needs.  The husband has had some recent health issues.  He had a few questions about protecting their assets if he passed away first and his wife decided to remarry.  He wants to make sure that their kids receive their estate’s assets and that they don’t go to a new husband or the new husband’s family.

Their questions reminded me an old, silly joke:  Fred and Wilma are sitting together on their front porch one day.  Fred asks Wilma out of the blue “Wilma, if I were to die, would you remarry?”  Wilma said “Fred, don’t be silly, you are in great health.”  Fred said, “I know, but would you?”  Wilma said “Maybe so.  We’re still pretty young.”  Then Fred asked, “Would you let him live in our house?”  Wilma replied, “Fred this is weird.”  Fred said, “I know, but would you?”  Wilma said, “I guess so, its paid for.”  Then Fred said, “Would you let him drive my truck?”  Wilma said, “Fred, can we stop this?”  Fred asked her again.  Wilma said, “I guess so.  It would just be sitting there I suppose.”  Then Fred said, “Ok, one more.  Would you let him play with my golf clubs?”  Wilma replied, “No.”  Fred said, “Why not?”  Wilma said “He’s left-handed”.

It’s a silly story designed to illustrate that affairs and remarriage happen.  Protecting your assets from remarriage for the benefit of your children is one of things that we do at The Jones Law Firm.  There are several ways to do so and they all involve the use of Trusts.

Contact us at The Jones Law Firm to learn more.

Texans Experience Estate Planning Mishap

Here’s another story and another reason to avoid Probate.  I was handling an out-of-state probate (I’m licensed to practice in Texas and a couple of other states) for my deceased cousin a few months ago.  My cousin had been represented by another attorney in the preparation of his Will and had spent a good bit of money on legal fees in the process.  (I would have advised against a Will and for a Trust instead!)  After he passed away, his immediate family came to me for help with his estate and to probate the Will.  

I began preparing the pleadings and the accountings and worked closely with my cousin’s family.  We filed the original of the Will with the Clerk of Court, as we are required, and the Clerk acknowledged receiving it.  Several weeks went by while we waited on the Court to “confirm” the appointed Executor.  When it got to the point that it appeared that it was taking too long, (two months) we contacted the Clerk to see if there was a problem.  The Clerk called us back and said that the original Will was missing from the Court’s records.  The Clerk went on to say that since the Will was missing that we would have to re-draft and re-file our pleadings to change from a “testate” proceeding to an “intestate” proceeding (meaning without a Will). The Clerk told the family the same and they were inconsolable.  

They knew how much effort and expense my cousin had gone to in preparing the Will.  They also knew that if the Clerk was correct and the matter had to be re-filed as an intestate matter, that the law of descent and distribution would control, that his estate would be divided amongst many heirs rather than the few that had been named in the Will and that they would likely receive significantly less than my cousin had intended. 

Fortunately, the Clerk was wrong in her opinion that we needed to re-file the matter, and, about two weeks later, the Will was found.  It had been placed in another probate file by accident.  We eventually worked through the matter but not before the family endured the additional worry of the lost Will and the fear of having to share my cousin’s estate with other heirs.  If my cousin had relied upon a Trust instead of a Will for his estate planning vehicle, all the angst and all the probate expenses could have been avoided.