Don Jones Estate Planning

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!

 

Simple Steps Texas Couple Takes to Avoid Estate Planning Nightmare with Son’s Blended Family

Today, I helped a man and his wife from Dallas, Texas.  They have accumulated a real estate business that is worth $5-6 million.  They have one child, a son, who is in his late 40’s.  The son has 2 children from his first marriage and is engaged to a girl that has 3 children from her first marriage.  They are NOT fond of the new fiancé and want to make sure that she doesn’t wind-up with their estate or assets.  They really like the fiancé’s 3 children but don’t want their estate to go to them either.  They want to make sure that it is preserved for their son and his kids rather than his new wife and her kids.  And, they don’t feel guilty or selfish in handling it this way since they understand that the fiance’s ex-husband is wealthy and has already done some estate planning for his 3 kids.

They are more concerned, though, that that if his son received this large estate all at once, then it might do more harm than good, because he has always spent more than he has had. So we discussed arranging an estate plan so that after the husband and his wife pass away, the estate will remain in trust for the benefit of the son. The son will receive annual distributions from the Trust. When the son passes away, the remaining assets will remain in the trust for the benefit of the son’s 2 children. The new daughter-in-law would not inherit or receive anything from them, nor would her 3 children.

You too, can make sure that your assets stay in your family, and out of the hands of new spouses and their children by reaching out to us.  Contact us so that we can have a conversation about how simple it is to get things set up the right way - the first time.

Call us at 214.220.2130. 

Donald R. Jones

www.JonesEstatePlanning.com

www.GetMyAffairsInOrder.com

www.NoLawyersNoJudgesNoCourtrooms.com  

 

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.

What Texans Should Know About Probate

I got a call from a Dallas couple today.  They asked a few questions that I thought I would share.  They had heard about Probate and how it should be avoided, but, they really didn’t know what Probate was.  So here’s what I told them:

Probate occurs whenever someone dies owning assets in their individual names.  An estate can go through probate with a Will and without a Will.  The main objective of probate is to change the title of assets from the deceased person to his heirs or beneficiaries.  The title of assets is generally held in the owner’s name. When the owner dies, his assets are frozen and cannot be transferred without the names on the titles being changed.  The probate court is almost always the only body that can change the title of assets from someone that has passed away.  In addition to changing the title, the probate court resolves disputes amongst claimants, approves payment of creditors, inventories assets, and distributes the assets with good legal title to the heirs or beneficiaries named in the will. If there is no valid will, the assets are distributed according to the Texas law of descent and distribution.  There are lots of disadvantages to Probate.  First, probate can be a long and painstaking process. Probate can take from several months to several years to complete.   Another major drawback of probate is that its proceedings and filings are a matter of public record. The probate court records that list your assets and their values and who receives your assets may be open to the public during the probate process and forever after.  And, once they are part of the public record, they find their way to the Internet.   This leaves the surviving spouse or other heirs vulnerable to financial scam artists who may have access to information relating to the surviving spouse’s and other beneficiaries’ inherited assets.

Probate will occur not only in the state in which you reside at the time of your death, but also in every state where you own real estate.  And, in some cases, the probate court may require your executor or administrator to post a financial bond to ensure that he fulfills his duties. Many states’ laws set the fee attorneys and executors can charge. They require that fees be a fixed percentage of the estate.  Using this method, fees can range anywhere from three percent to ten percent or more of your family’s gross estate.  In Texas, we have a vague “reasonableness standard”.  As a result, we sometimes see people paying a lot more than they should for the services that they receive.