According to Injury Facts®, a fatal injury occurs every 5 minutes. In contrast, a disabling injury occurs every 1.5 seconds. Motor vehicle accidents cause a death every 12 minutes and a disabling injury every 14 seconds.

According to the National Safety Council, income lost as a result of disability is 2 times greater than auto accident losses, and 3 times greater than fire losses.

Almost 3 in 10 of today’s 20 year-olds will become disabled before reaching age 67, according to Social Security Basic Facts.

1 in 5 people will be disabled for one year or more before age 65.

Women between ages of 35 and 65 are 40% more likely than men to become disabled for 90 or more days.

For 30-year-old males, the risk of a long-term disability is 4.1 times more likely than the risk of death. For 40-year-olds, it is 2.9 times more likely. And at age 50, it is 2.2 times more likely.

Currently, only 15% of workers have any type of disability insurance (DI) coverage.

72% of the private sector workforce has no long-term disability insurance.

If you would like a copy of my new guide “Life-Care Planning for the Aging and those with Long-Term Illness”, email me at LHilton@dentonlawyer.com.  

Leigh Hilton, Attorney at Law
Sawko & Burroughs, P.C.
1100 Dallas Drive Suite 100
Denton, TX 76201
940 382-4357
LHilton@dentonlawyer.com

The information contained in this blog is for informational purposes only and is not legal advice. Nothing in this blog should be deemed to create or constitute an attorney-client relationship between any readers and this firm. An attorney-client relationship is created only when this firm agrees to represent someone and a written employment agreement or engagement letter is signed by both the client and attorney. In all cases, the reader should consult his or her own attorney for advice. The information in this blog is based on Texas law.

It’s 8 pm and the pain in your chest is still there.  You finally admit to your loved one that maybe it’s time to go to the hospital.  You can see their worry as they grab the car keys and hurry you out the door to the emergency room… 

Let’s face it, going to the hospital can be a little frightening.  But there are ways to prepare yourself and your loved ones.  A little bit of preparation can make the experience better for everyone: you, your family, and the hospital staff. 

1.         Make sure that your healthcare power of attorney is up-to-date.  This document names the person (or persons) you would like to make medical decisions for you if you can’t do so.  Review this document periodically to make sure your choice(s) is still valid.

2.         Review your Living Will.  This document states your desires regarding treatments you would (or would not) want to receive in the hospital if you cannot make these decisions yourself.  Your living will is an important resource for your healthcare power of attorney should he/she need to make decisions about your care.

3.         Make your decision about organ donation and document it.  If you would like to donate your organs at the time of your passing, make that decision now and put it in writing.  One organ donor can save up to 8 lives and the need far exceeds the supply.

4.         Talk to your loved ones about your healthcare choices:  who you’ve named as your healthcare power of attorney, what your medical wishes are, and whether you want to be an organ donor.  The more they know in advance, the easier it will be for them if they ever have to step in. 

5.         Carry an emergency document wallet card.  One of the items I provide for my clients is this card because I knows that immediate access to your emergency information and healthcare directives is important.  Make sure that your card is next to your driver’s license in your wallet at all times. 

At the hospital, the ER staff will ask you many questions.  One of them is whether you have a living will or other healthcare directive (they may call it an “advance directive”).  You or your loved one presents your emergency document card.  Hospital staff can make immediate note of the allergies and medical conditions on your card.  They then use the card to obtain your directives, adding them to your chart immediately.  There is no fuss about where your living will is or who should go back home to get it.  Your card takes the stress off you and your family when the focus should be on your health, not your healthcare directives.

If you would like a copy of my new guide “Life-Care Planning for the Aging and those with Long-Term Illness”, email me at LHilton@dentonlawyer.com.  

Leigh Hilton, Attorney at Law
Sawko & Burroughs, P.C.
1100 Dallas Drive Suite 100
Denton, TX 76201
940 382-4357
LHilton@dentonlawyer.com

The information contained in this blog is for informational purposes only and is not legal advice. Nothing in this blog should be deemed to create or constitute an attorney-client relationship between any readers and this firm. An attorney-client relationship is created only when this firm agrees to represent someone and a written employment agreement or engagement letter is signed by both the client and attorney. In all cases, the reader should consult his or her own attorney for advice. The information in this blog is based on Texas law.

If your spouse does not have a will or a trust, the answer is yes.  To prevent this, your spouse can specify in a will or trust who gets what.  But if there is no will or trust, under Texas law you become co-owners with your step-children.  

I had one client whose husband died suddenly.  He had purchased a piece of raw land one year before they got married.  They built a business building on his separate property.  The wife ran the business for over 20 years.  The husband had a full-time job.  He did not have a will or trust, because he was not planning on dying.  He was only 52 years old when he had a heart attack.  The wife and stepchild became co-owners of the property.  

Another client I had was a stepchild.  Her father had remarried and died within a year of the marriage.  The main asset he had was his house that he had owned prior to marriage.  Under Texas law, the step-mother had the right to live in the house for the rest of her life.  The stepchild and the mother argued over the contents of the house.  Also, under Texas law the stepchild had to pay a portion of the expenses.

If you would like a copy of my new guide “Life-Care Planning for the Aging and those with Long-Term Illness”, email me at LHilton@dentonlawyer.com.  

Leigh Hilton, Attorney at Law
Sawko & Burroughs, P.C.
1100 Dallas Drive Suite 100
Denton, TX 76201
940 382-4357
LHilton@dentonlawyer.com

The information contained in this blog is for informational purposes only and is not legal advice. Nothing in this blog should be deemed to create or constitute an attorney-client relationship between any readers and this firm. An attorney-client relationship is created only when this firm agrees to represent someone and a written employment agreement or engagement letter is signed by both the client and attorney. In all cases, the reader should consult his or her own attorney for advice. The information in this blog is based on Texas law.

The weather is getting warmer. Warm weather usually means travel. And while fun and exciting, travel can also mean accidents, illness and unexpected conditions.

This summer as you make plans to visit family, go to the beach, or take that special trip, please take a moment to review your important legal documents. Just as you make sure that someone gets your mail, waters the plants, etc. before you travel, you should take a moment to ensure that your estate planning documents are up to date and still reflect your wishes.

During this review, please pay particular attention to your healthcare directives, (i.e. your living will and health care power of attorney). These documents prepare you for a medical emergency. Please make sure that they still reflect your current wishes.

Another way we help you prepare and protect our clients is by registering their healthcare directives with the emergency document bank. Their emergency card provides immediate access to their healthcare directives and emergency information. The card will provide important information to the hospital or in a clinic abroad. Anywhere there is an internet connection or a fax machine, the emergency card can deliver their information to the hospital and medical personnel who need it.

If you do not have an emergency card yet, please contact us. We’ll be happy to make sure your directives are registered. And if you have any changes to your directives once you’ve had a chance to take a look at them, please let us know. We’ll do our best to make the changes you need in time for your travel plans.

We hope you enjoy the warm weather and your summer plans! And when you travel, make sure you have your emergency card in your wallet.

If you would like a copy of my new guide “Life-Care Planning for the Aging and those with Long-Term Illness”, email me at LHilton@dentonlawyer.com.  

Leigh Hilton, Attorney at Law
Sawko & Burroughs, P.C.
1100 Dallas Drive Suite 100
Denton, TX 76201
940 382-4357
LHilton@dentonlawyer.com

The information contained in this blog is for informational purposes only and is not legal advice. Nothing in this blog should be deemed to create or constitute an attorney-client relationship between any readers and this firm. An attorney-client relationship is created only when this firm agrees to represent someone and a written employment agreement or engagement letter is signed by both the client and attorney. In all cases, the reader should consult his or her own attorney for advice. The information in this blog is based on Texas law.

If the parents wanted to exercise more control over the distributions, they could creat a trust that allows the trustee to distribute trust income and principal from to a child for their health, education or maintenance, so long as they are living by the family’s values.  If a child gets into drugs, gambling or has other problems, the trustee can turn off the “spigot” and refuse to distribute assets from the lifetime trust until the child shapes up, cleans up and gets back on track.  Meanwhile, the trust allows the trustee to “redirect” the trust’s assets to assist the child by paying for the counseling, drug testing, therapy, etc. necessary to help the child get back on their feet.

 

The Rays included extensive guidelines and values for their children in each lifetime trust.  For instance, they directed that their trustee may assist a child by distributing income and/or principal out of a trust for:

 

·        A down payment towards purchasing and furnishing a home.

·       A down payment towards purchasing or establishing a business or professional practice.

·        Travel to foreign countries for cross-cultural experiences and education.

·        The reasonable expenses of a first wedding and honeymoon.

·        Expenses while a child’s a full-time student maintaining at least a 2.5 GPA.

·        Expenses while a child is pursuing an educational, scientific or charitable goal which is in the best interests of the child and the public, and which makes the child a productive member of society.

·        Living expenses if a child becomes disabled and is prevented from being a productive and self-supporting member of society.

·        Expenses or income replacement if a child is occupied in full-time caregiving for family members such as children or other relatives and that obligation precludes the child from earning a living (a stay at home parent, for example).

·        Supplemental income and expenses if a child is employed full time in an occupation to which he or she devotes at least 35-40 hours of work per week or is pursuing a career full time which is low-paying but socially productive, such as a missionary, teacher, artist or musician.

·        Any other extraordinary expense that is in the best interests of the child.

 

Additional language ensured that the trustee would consider the future probable needs of the child, and would help educate the child on the long-term tax advantages of retaining funds inside qualified plans, IRAs and such.

 

The Rays’ goal was to set up their estate plan so that the wealth left to their children would not be a burden or negative influence, but would provide a positive structure with incentives and directions to enable Jane and John to make the most out of their lives.  By using lifetime trusts with detailed instructions, values and guidelines, the Rays succeeded in protecting their hard-earned wealth from their children’s “inabilities, disabilities, creditors and predators” and have provided their children with invaluable guidance and financial support that will create a legacy to benefit their descendants for generations to come.

 

If you would like a copy of my new guide “Life-Care Planning for the Aging and those with Long-Term Illness”, email me at LHilton@dentonlawyer.com.  

Leigh Hilton, Attorney at Law
Sawko & Burroughs, P.C.
1100 Dallas Drive Suite 100
Denton, TX 76201
940 382-4357
LHilton@dentonlawyer.com

The information contained in this blog is for informational purposes only and is not legal advice. Nothing in this blog should be deemed to create or constitute an attorney-client relationship between any readers and this firm. An attorney-client relationship is created only when this firm agrees to represent someone and a written employment agreement or engagement letter is signed by both the client and attorney. In all cases, the reader should consult his or her own attorney for advice. The information in this blog is based on Texas law.

 

Last post we discussed ways to transfer wealth to our children.  We also met Tom and Sally Ray.  Tom is a cardiologist and Sally recently returned to work as a realtor.  Both are in their late forties.  They have two teenage children, Jane and John, and a net worth of $2,300,000.  Their wealth is expected to reach $9,000,000 in less than ten years.

 

The Rays asked me to assist them in creating a legacy for their family.  They wished to leave their children more than just financial wealth; they wanted to provide them with lessons and values to help guide their lives after Tom and Sally are gone.  They also wanted to provide some asset protection for the inherited wealth in case their children encountered some difficulties during their lives, such as drug abuse, lawsuits, bankruptcy or divorce. 

 

To create their family legacy, the Rays shared with me what is important in their lives and within their family.  For them, their family values included professional achievement, academic excellence, a Christian home life, social contribution, financial responsibility, community involvement and devotion to family.  We began designing their legacy plan with a customized, comprehensive revocable living trust for both Tom and Sally and transferred all their assets to the trusts so that probate would be eliminated and the trustees could maintain control of their property upon death or incapacity. 

 

Inside the revocable trusts we created a lifetime trust for each child that springs into effect when the surviving spouse dies.  This type of trust provides the greatest amount of asset protection and guidance for John and Jane throughout their lives.  A professional trustee, along with a relative as a co-trustee, serves as the “gatekeeper” of the trusts.  The trustees have ultimate discretion when and how to release the money in the trust to the children, and are guided by instructions and values that Tom and Sally draft into the trusts. 

 

Once both Tom and Sally die, the estate is divided equally into each child’s lifetime trust.  The trusts allow the trustee to distribute trust income and principal from to a child for their health, education or maintenance.

 

If you would like a copy of my new guide “Life-Care Planning for the Aging and those with Long-Term Illness”, email me at LHilton@dentonlawyer.com.  

Leigh Hilton, Attorney at Law
Sawko & Burroughs, P.C.
1100 Dallas Drive Suite 100
Denton, TX 76201
940 382-4357
LHilton@dentonlawyer.com

The information contained in this blog is for informational purposes only and is not legal advice. Nothing in this blog should be deemed to create or constitute an attorney-client relationship between any readers and this firm. An attorney-client relationship is created only when this firm agrees to represent someone and a written employment agreement or engagement letter is signed by both the client and attorney. In all cases, the reader should consult his or her own attorney for advice. The information in this blog is based on Texas law.

Outright Distribution:  An outright distribution is just that, mom and dad die and Johnny and Jane receive their inheritance outright, in one lump sum.  Simple, clean, but dangerous.  Statistics show that an inheritance will be gone within 18 months of a child receiving it.  And it does not matter how old the child or how much the inheritance.  If a child gets divorced or goes bankrupt, the inheritance could be lost.  An outright distribution does not allow for legacy planning. 

 

Convenience Trust:  With this arrangement, the inheritance is distributed to a trust, but the child can withdraw the trust assets at any time and for any reason, just by requesting it.  There may be an independent trustee managing the trust, or the child may be their own trustee or co-trustee.  Since no one can force the child to withdraw the income and principal from the trust, the convenience trust offers some creditor protection, and perhaps a mental barrier to withdrawing the trust’s assets, but not much else. 

 

Step-Distribution:  This method is a more commonly used method of leaving money to your heirs.  I call it the “speed-bump” approach.  With this type of distribution, the inheritance flows into a trust, usually with an independent trustee, that is managed and controlled for the child.  At certain intervals in the child’s life, a portion of the trust’s principal is released in a lump sum to the child.  For example, one third of the principal is paid to the child at age 30, one half at 40 and the remainder at 55.  They still have access to income and principal for health, education and other guidelines you structure, but you can leave your children a powerful message with this type of trust – “don’t blow the inheritance!”  The idea is that if they blow it the first time, they may not get any future distributions.  This may act as an incentive to the child to manage their money well, but it still adds little asset protection, and once the principal is gone, it’s out of your bloodline and gone forever.  

 

Lifetime Trust:  This type of trust holds and manages the child’s inheritance for the life of the child.   An independent trustee is usually chosen to manage the trust and many times the child can serve as co-trustee.  Principal and income may be distributed according to various guidelines and incentives that the parent provides in the trust document.  These guidelines act as a spigot or faucet:  adhere to the guidelines and philosophies of the trust and assets will flow; get into trouble and the trustee can turn the spigot off.  Once the child dies, any remaining assets in the trust can pass to the child’s heirs or other individuals or entities.  The lifetime trust provides the most flexible vehicle for values-based legacy planning.  It also provides the greatest degree of asset protection, including protections against divorce, bankruptcy and lawsuits such as malpractice or personal injury.   This is by far the most popular choice of trust arrangements among my clients.

 

Next post, we’ll take a look at how we designed the Ray’s estate plan to provide a values-based family legacy with the desired incentives, guidance and protections for their children and grandchildren.

 

If you would like a copy of my new guide “Life-Care Planning for the Aging and those with Long-Term Illness”, email me at LHilton@dentonlawyer.com.  

Leigh Hilton, Attorney at Law
Sawko & Burroughs, P.C.
1100 Dallas Drive Suite 100
Denton, TX 76201
940 382-4357
LHilton@dentonlawyer.com

The information contained in this blog is for informational purposes only and is not legal advice. Nothing in this blog should be deemed to create or constitute an attorney-client relationship between any readers and this firm. An attorney-client relationship is created only when this firm agrees to represent someone and a written employment agreement or engagement letter is signed by both the client and attorney. In all cases, the reader should consult his or her own attorney for advice. The information in this blog is based on Texas law.

 

Tom and Sally Ray (not their real names) are two middle-aged professionals who have worked hard to build their medical practice into a successful business.  Their net worth, including life insurance, pension and retirement plans is approximately $2,000,000 and growing.  Their two children, John and Jane, are in their early teens.  Both Tom and Sally expect to receive an inheritance from their own parents within the next ten years, which will add to their wealth.

 

The Rays came to me to assist them in creating a family legacy.  They wished to leave their children more than just financial wealth, and they wanted to provide some asset protection in case their children encountered any trouble during their own lifetimes, including chemical addictions, divorce or bankruptcy.  Their goal was to set up their plan so that the inheritance left to John and Jane would not be a burden or negative influence, but would provide a positive structure with incentives for the children – and their children’s children – to make the most of their lives.

 

Sally and Tom, although living next to a local golf course, have tried hard to raise their children to be down-to-earth and to adhere to basic family values.  For the Rays, these values included adherence to a family philosophy centered around a religious and spiritual home life, professional achievement, academic excellence, social contribution, financial responsibility, community involvement and devotion to family.

 

In the Rays’ case, we began with a discussion of some of the ways that we can transfer wealth to our heirs:

 

1)                  Outright

2)                  Convenience Trust

3)                  Step-Distribution Trust and

4)                  Lifetime Trust.

 

We will explore the advantages and disadvantages of each option in the next post.

 

If you would like a copy of my new guide “Life-Care Planning for the Aging and those with Long-Term Illness”, email me at LHilton@dentonlawyer.com.  

Leigh Hilton, Attorney at Law
Sawko & Burroughs, P.C.
1100 Dallas Drive Suite 100
Denton, TX 76201
940 382-4357
LHilton@dentonlawyer.com

The information contained in this blog is for informational purposes only and is not legal advice. Nothing in this blog should be deemed to create or constitute an attorney-client relationship between any readers and this firm. An attorney-client relationship is created only when this firm agrees to represent someone and a written employment agreement or engagement letter is signed by both the client and attorney. In all cases, the reader should consult his or her own attorney for advice. The information in this blog is based on Texas law.

The primary focus – or base – of any estate plan should be that which is most important to us, namely, taking care of ourselves and our loved ones.  Next comes the security of preserving our current wealth, then growing that wealth and, finally, saving estate taxes, professional fees and avoiding probate.  Often, it may be the thought of those sky-high estate taxes or time-consuming probate that initially prompts a client to call for an appointment, but when we begin discussing what is most important in their lives, the answer is always: “me and my family.”  Having that as the base of the pyramid creates a strong, stable foundation on which to build the rest of the plan.

 

Many estate attorneys take the upside-down approach to planning.  They reverse the planning priorities.  They focus instead on saving taxes and fees, and spend little time on drafting unique plans that address what is truly personal to their clients. 

 

Like the medical practitioner, estate planners all have the same legal tools with which to work.  What distinguishes a good planner from the average, however, is knowing which tools to use for a particular client.  Which club do we take out of the golf bag?  In order to know which tools to use, we must first spend a substantial amount of time listening to our clients in order to discover their hopes and fears, their goals, philosophies, ideas and values.  Because every family is unique, every estate plan should be unique.  That’s the beauty of using a client-centered, values-based approach to estate planning.  It may take a little more effort to create, but it is tailored specifically for you.

 

Next post, we’ll continue with how we can use the values-based approach to transfer wealth down to the next generation.  Stay tuned.

If you would like a copy of my new guide “Life-Care Planning for the Aging and those with Long-Term Illness”, email me at LHilton@dentonlawyer.com.  

Leigh Hilton, Attorney at Law
Sawko & Burroughs, P.C.
1100 Dallas Drive Suite 100
Denton, TX 76201
940 382-4357
LHilton@dentonlawyer.com

The information contained in this blog is for informational purposes only and is not legal advice. Nothing in this blog should be deemed to create or constitute an attorney-client relationship between any readers and this firm. An attorney-client relationship is created only when this firm agrees to represent someone and a written employment agreement or engagement letter is signed by both the client and attorney. In all cases, the reader should consult his or her own attorney for advice. The information in this blog is based on Texas law.

 

Planning for the wise transfer of wealth from one generation to the next is a major focus – and one of the most rewarding areas – of my estate planning practice.  Virtually all of my clients want to pass at least a portion of their estates to their children and grandchildren.  The question we deal with then, is how to do so wisely, so that their children and grandchildren not only inherit their wealth, but also inherit their values. 

 

One of the biggest fears my clients share is that once they are gone, their children and grandchildren will become trust fund babies.  Another fear is that a child will lose the family wealth through divorce, bankruptcy, lawsuits, or simply waste it by overspending.   These fears are justified.  Statistics show that the younger generation (this includes the baby boomers, too) has a one in two chance of experiencing either a divorce or a bankruptcy in their lifetime, and we probably all know at least one trust-dependent person who lives from one trust distribution to the next, without any incentive for becoming a productive member of society. 

 

Fortunately, we can plan for and avoid these issues with our own children (and grandchildren), by applying what I call the “values-based approach” to the thoughtful drafting and design of our estate plans.   

The next several posts will focus on how we use the values-based approach to create uniquely personal family legacies for ourselves and our descendants.

If you would like a copy of my new guide “Life-Care Planning for the Aging and those with Long-Term Illness”, email me at LHilton@dentonlawyer.com.  

Leigh Hilton, Attorney at Law
Sawko & Burroughs, P.C.
1100 Dallas Drive Suite 100
Denton, TX 76201
940 382-4357
LHilton@dentonlawyer.com

The information contained in this blog is for informational purposes only and is not legal advice. Nothing in this blog should be deemed to create or constitute an attorney-client relationship between any readers and this firm. An attorney-client relationship is created only when this firm agrees to represent someone and a written employment agreement or engagement letter is signed by both the client and attorney. In all cases, the reader should consult his or her own attorney for advice. The information in this blog is based on Texas law.