Suing Dad. The Stress of Guardianships.

Suing dad. What happens when you can’t make decisions anymore, when you can’t sign your name, when you can’t request your medical records or do what needs to be done? You may reach a point in your life where you are unable to take care of daily necessities or make effective choices, and under those circumstances, your loved ones may have to sue you to properly take care of you.

Richard has Alzheimer’s disease and lives alone. His children are worried about their dad because his neighbors had called for the second time to let them know that they helped Richard get back home after finding him lost walking around the neighborhood. Richard left the stove on recently and started a small fire that thankfully didn’t harm anyone, but did cause some smoke damage in the house. Richard has also lost a significant amount of money after some phone scammers convinced him to give them his bank account number. Richard’s children are worried about him and are afraid that they can’t be there enough of the time to make sure that he is safe as his condition worsens. The problem is that Richard refuses assistance from the meal delivery and home-care services that the children have tried to set-up and is refusing any further care that the children believe is necessary to protect him.

All Richard’s children want to do is to protect their dad’s health and well-being and keep him from being exploited financially again in the future. Richard did not have anything in place to address this type of situation, and as a result, his children have to sue their dad in the Tarrant County Probate Court to obtain Guardianship over him. Guardianship will give them the same authority that parents have over their minor children and will allow them to take care of Richard, who is now mentally incapacitated due to Alzheimer’s disease.

To obtain Guardianship over their dad, the children will need to sue their dad, have a judge declare that Richard is incompetent and prove to the court that they are the appropriate guardian in this situation. This process can be emotionally draining and expensive depending on the circumstances surrounding the individual with mental incapacity. It may feel like racing against time if they are in danger of being exploited financially or are in physical or other danger as a result of their condition.

Many people would rather avoid the guardianship process altogether as it takes time, can be expensive, and the details of your incapacity may become public knowledge since the process involves court proceedings. One part of effective estate planning includes determining who will have authority to care for you and your finances if you are no longer capable of doing so for yourself. The good news is, that if you plan in advance, a comprehensive estate plan will allow you and your loved ones to avoid the guardianship process altogether.

Effective options that avoid Guardianship include powers of attorney and living trusts. Powers of attorney are legal documents that allow you to give authority to someone to conduct your affairs. It is important to understand that these are only voluntarily accepted in Texas, meaning that a bank or title company may choose not to accept the documents which would could still result in Guardianship proceedings. A living trust is another option that can avoid a guardianship, and does so by allowing you to name a successor trustee to manage your assets should you become incapacitated in the future.

Regardless of what stage of life you are in, unforeseen circumstances can occur, and it’s important to prepare for the unexpected. Effective estate planning allows you to answer the question, what happens when I can’t make decisions anymore? A customized and well-thought out plan made today will keep you and your loved ones from having to consider or experience – suing dad.

Is A Living Will Necessary?

I was recently speaking from one of my clients from the North Richland Hills area, and they asked me whether it was important to have a Living Will and/or an Advanced Healthcare Directive. This client had heard from the news that it might be better not to have this legal document.

I answered an emphatic, YES! It is exteremly important to have an Advanced Health Care Directive / Living Will! An Advanced Healthcare Directive, commonly referred to as a Living Will, is a legal document that states what your final wishes will be when it comes to the withdraw and withholding of life support systems. For example, if you wish to have a feeding tube and artificial breathing machines removed should be in an irreversible medical condition of which you will have zero chance to recover, this is where you would state your wishes. In addition, the Living Will can state your wishes when it comes to organ donation, as well as the authorization of experimental medical treatment.

I explained to this client that without an Advanced Healthcare Directive / Living Will should something happen to you, and you be in this irreversible medical condition, your surviving family would have to make the decision for you. I explained, in my experience, family members have a very difficult time making this decision, and have a hard time letting go, even when that is the right thing to do. I also explained that in addition to the Advanced Healthcare Directive / Living Will, you should also have a Healthcare Power of Attorney, which is a document naming some one to make healthcare decisions for you should you become incapable of doing so yourself.

If you have questions about Advanced Healthcare Directives / Living Wills, Healthcare Power of Attorneys, or Estate Planning in general, please contact our office to schedule an in office consultation. Also, if you are just starting the process of thinking about estate planning, a good place to start would be to attend one of our educational seminars and download one of our special legal reports on estate planning here on the website.

If you have questions, please contact us, we are always here to help!

P.S., if you have not updated your Living Will since 2010, it would be best to do so. Given the law changes since 2010, many Living Wills are out-of-date.

Introduction

Hey there, I’m Leslie Thomas with Thomas Walters.  I’m an estate planning attorney here in Fort Worth and have practiced here in Fort Worth since 1993 and I am the author of an article on Estate Planning in Texas.  I would like to invite you to a free special presentation that our law firm is hosting where we are going to share all of the latest and greatest legal strategies really in layman’s terms.  How to do things like avoid taxes when you pass away, how to keep the government out of the settlement of your estate, how to make sure you don’t lose everything to an unexpected nursing home stay.  So there are many legal strategies that we are going to share with you and it is real important that you attend, because you can’t really take action on these strategies until you first educate yourself about what they are.  So that’s what it is designed to do.  We are going to share a few stories about people and families who planned ahead and really kept things in the family, really kept those family relationships strong.  We are also going to share some stories about families we have had to work with who didn’t plan ahead and things didn’t really work out so well for those families. 
It's a fun, entertaining educational planning event.  It lasts about an hour. All you need to do to register is, on the left there is all the registration information for our upcoming events.  You can register either by telephone or online. And for those of you who do register in advance and attend you are going to receive a free copy of my article about estate planning in Texas.  Which again describes some of these strategies that we are going to be talking about in layman’s terms.  We look forward to seeing you there and have a great day.  

If you die without a will is probate necessary?

The answer is yes and, in fact, it is actually worse if you die without a will because you have to go through a determination of heirship where the judge has to figure out who the relatives of the deceased are. Then you are at the mercy of whoever the state as determined should get your money and how much they should receive.  Dying without a will almost always involves additional lawyers becoming involved and this just makes an already expensive probate procedure more expensive and time consuming as everyone works to figure out who all of the deceased’s relatives are. 

What is Probate?

Probate is probably one of the most misunderstood things in the law.  Probate is where someone has passed away and their name is on an asset and we have to take their name off the asset to transfer it to their heirs.  The problem with probate is that it is fairly complex, time consuming and can be expensive once you have to get attorneys and the courts involved.  In many places wills are placed on the internet, and in many places people are required to file a list of the deceased’s assets and that list gets placed on the internet for everyone to see.  So the biggest problems with probate is cost, delay and loss of privacy. The best alternative to probate is fully funded revocable living trust prepared by a qualified estate planning attorney.  

What is a Revocable Living Trust?

A question I get a lot from clients is what is a revocable living trust.  This is a trust you set up while you are alive, since it is revocable that means you can change it whenever you want to, it is a document that you create that really does two things.  If the person who sets up the trust becomes disabled, it allows someone that you designate, the trustee of the trust, to manage your assets, distribute them to you, and take care of you if you are incapacitated.  And, if done correctly, the revocable living trust can avoid probate.  Assets can be passed to your loved ones without court involvement.  This saves time and money and protects your privacy.  One of the big reasons to avoid probate is to ensure that your assets are kept private when you die.  The Revocable Living Trust is the primary vehicle that we see families using to make things as simple as possible for their loved ones when they die.  

The Purpose of an Irrevocable Living Trust

An irrevocable trust is used in rare circumstances.  Most trusts are revocable living trusts, you can change them.  Irrevocable trusts are special and not used as much because they are irrevocable, which means it is unchangeable. One of the most common irrevocable trusts is a life insurance trust.  It allows someone to take a life insurance policy, put it into the trust and keep the IRS from ever taxing the death benefits of that life insurance policy.  Without an irrevocable life insurance trust the death benefits from the life insurance policy are fully taxable for estate tax purposes.  Another common irrevocable trust is a charitable trust.  Most charitable trusts are set up to allow people to give money to charity, maybe get some income and tax benefits during their lifetime, but to leave money to charity after they die. But most charitable trusts that are set up are irrevocable.  The most common irrevocable living trust that we see is the Medicaid irrevocable trust.  This trust allows you to set up a trust, transfer the title to your assets into the trust, you can be the trustee of your trust, you can continue to receive the income from the assets in the trust, but if it is set up at the right time and in the right way, you can protect all of the assets in that trust from future nursing home expenses. 

Should You Put Your Special Needs Trust in Your Revocable Living Trust or a Stand Alone Trust?

The benefits of putting a special needs trust in your revocable living trust is that it is more flexible and it is changeable.  We don’t know what the law is going to be in 20 or 30 years, we don’t even know what it is going to be next week.  If the law changes in the future and your special needs trust is in your revocable living trust it is very easy to change the terms of that special needs trust, keep your child eligible for SSI and Medicaid, and still have the benefit of all the money you put in the special needs trust for them when you die.
The benefit of a standalone special needs trust is that it is irrevocable which might not sound like a benefit, but it can definitely be a benefit in certain circumstances.  For example if someone wants to give a gift or leave an inheritance to the special needs individual, they can just gift or leave that inheritance to the standalone special needs trust without having to go to the trouble of setting up a separate special needs trust or perhaps inadvertently giving the special needs individual an inheritance that disqualifies them from SSI or Medicaid.  This way other people can give money to the special needs individual and they are still eligible for their benefits.  Now if there are changes in the law in the future, the best way to protect against that and allow some changes to be made to the special needs trust is to appoint a trust protector.  A trust protector is someone who isn’t a relative, but is a trusted member of a wider circle of friends, it keeps the trust it as flexible as it can be, but will allow some changes to be made so that if the law changes the trust can still be in compliance so that the special needs individual can continue to receive benefits.