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Power of Attorney as an alternative to Guardianship for an Elderly Individual

A power of attorney is a document in which one person gives another person (the “agent” or “attorney-in-fact”) the ability to make legal decisions on his/her behalf.  The power of attorney document can be tailored to the maker’s needs.  For instance, the power can be limited to medical decisions, or to financial decisions, or to take one specific action.

However, a special kind of power of attorney gives the agent the ability to make just about every legal decision on behalf of the maker.  This is called a durable general power of attorney.  It is “general” because it gives the agent the broadest range of powers.  It is “durable” because it will remain in effect even if the maker becomes incapacitated.  As such, the durable general power of attorney has powerful authority to help take care of the maker in the event the maker is legally incapacitated–the agent can pay bills, make transactions, sell property, and so forth.

What is Guardianship?

If a doctor or court finds that someone is legally incapacitated, that person no longer has the ability to make legal decisions  With regard to adults, we see this with people with Alzheimer’s, for example.

A guardianship is a legal relationship between the incapacitated “ward” and the guardian.  To get an idea of the kind of power the guardian has, think of the legal authority a parent has in relation to his/her child.  Depending on the needs of the ward, the guardian can be a guardian of the estate (money decisions only), a guardian of the person (any non-money decisions), or both.

Which is better?  Guardianship or Durable General Power of Attorney?

Depends on the situation.

The cons to a guardianship are that it’s more expensive and more involved.  With a guardianship in Texas, the court (usually a probate court) MUST be involved.  There will be at least one hearing, and multiple guardianship attorneys will be involved.  It’s more involved because the ramifications are huge–the guardian is taking over the ward’s legal rights.

The durable general power of attorney is much cheaper and less involved.  There probably won’t be probate court interaction or anything like that.  It’s basically just a document that gets filed with the county clerk (and probably shown, as needed, to make transactions on behalf of the maker).

So, if the durable general power of attorney is so much easier than a guardianship, why would anyone choose to institute a guardianship?  Sometimes a Texas guardianship is necessary due to the particular nature of the incapacity at issue.  If the incapacity is severe and likely to last a long time, a power of attorney is probably insufficient.

If you have more questions about the information provided here, please visit http://www.shuttlawfirm.com, the website of Richardson attorney Isaac Shutt.

This blog does not constitute legal advice, and there is no attorney-client relationship until you sign an engagement letter with Shutt Law Firm, PLLC.

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What is a Special Needs Trust?

As a refresher, at it’s most basic level, a “trust” is a document that creates a legal relationship between a beneficiary and a trustee.  The trustee is the person tasked with taking care of the trust’s assets for the benefit of the beneficiary.  A Special Needs Trust (also called a “Supplemental Needs Trust”) is a special kind of trust that is specifically created for a beneficiary with special needs.  The typical beneficiary of a Special Needs Trust is someone with a disability such as Downs Syndrome or autism.

Why would anyone need a Special Needs Trust to help care for a disabled person?  How does the Trust help?

The Special Needs Trust helps protect the disabled person’s eligibility for government benefits such as Medicaid or supplemental security income (“SSI”).  Many government programs, like Medicaid, look at the recipient’s income level to determine eligibility.  So, if a disabled person receives an inheritance or other large sum of money to provide for his/her care, this could destroy Medicaid eligibility.  This is where the need for Special Needs Trusts comes into play; instead of giving money for the beneficiary’s support directly to the beneficiary, you can give it to the trust for the benefit of the beneficiary.  This way, on paper, the beneficiary didn’t receive a large sum of money outright, and the beneficiary gets the benefit of the support money and gets to retain Medicaid eligibility.

How will the Special Needs Trust work?  How can you be sure that the trustee will take care of the disabled beneficiary?

The best way to get a special needs trust in Texas is to hire a special needs trust lawyer, choose trustees you can trust, take the trust document to the bank to set up a trust account, and then fund the trust account with the money you intend to provide the disabled beneficiary for the beneficiary’s support.

The most important thing with a Special Needs Trust is to form the trust document in such a way that the trustee can’t do something to make the beneficiary ineligible for government benefits.  For example, the trust should contain restrictions on the amount the trustee is allowed to disburse to the beneficiary.

You will pick a trustee and alternative trustee(s) in the trust document.  The trustee should be someone responsible and you know will look out for the best interests of the beneficiary.  It is also important that the trust is worded correctly and contains all the appropriate restrictions.  That is why it is a good idea to make the minimal investment on a Special Needs Trust attorney.  The trust attorney will ensure that the money going into the trust will (a) actually go to the benefit of the disabled beneficiary and (b) ensure that the disabled person remains eligible for government benefits.

 

Shutt Law Firm provides clients Special Needs Trusts in Dallas, Special Needs Trusts in Richardson, Special Needs Trusts in Plano, and throughout the DFW area.  Visit www.ShuttLawFirm.com for more information on Texas trusts, estate planning, probate, probate alternatives, or guardianship.


Visit http://www.shuttlawfirm.com or email ishutt@shuttlawfirm.com.  You can also call Mr. Shutt at (214) 302-8197 for more information on the topic discussed in this blog or to discuss a different legal matter.  Phone-calls and quick e-mails are always free at Shutt Law Firm PLLC.  Please consider the Shutt Law Firm if you’re looking for a Richardson probate lawyer, Richardson wills lawyer, Richardson estate planning attorney, power of attorney in Richarson, or Richardson guardianship lawyer.

DISCLAIMER:  Nothing in this blog post constitutes legal advice.  The information provided herein is merely provided in the spirit of education.  If you have a legal question, you should consult an attorney for your specific legal situation.   Further, nothing in this blog shall be construed to have started an attorney-client relationship.  No such relationship exists until you sign an engagement letter with the Firm.
http://www.ShuttLawFirm.com

 

 

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Texas Gun Trusts

The federal government regulates many kinds of weapons through the National Firearms Act (“NFA”).  States can restrict firearm ownership further, though Texas does not restrict firearm ownership beyond the Federal framework.  In part, the NFA states that individuals can’t own many kinds of weapons.

If you possess some sort of antique firearm or other firearm regulated by the NFA, such as a machine gun, suppressor, or sawed-off shotgun–then chances are, you know what a gun trust is.  For everyone else: a gun trust (also known as a “NFA Trust”), is a special kind of trust usually designed to own firearms that are regulated by the NFA (commonly referred to as “Title II” weapons).

The NFA carries an extremely stiff penalty for unlawfully possessing restricted firearms, including a $250,000 fine and 10 years in prison.  That should be enough to get your attention.  The government doesn’t particularly want civilians owning these weapons, and I think there is good reason to that.  However, many Texans own (or want to own or want to inherit) firearms that have significant personal, sentimental, and/or dollar value.  Therefore, there are mechanisms in place for lawfully possessing and transferring NFA firearms.

One of the most efficient ways to possess and transfer NFA firearms is through a NFA Trust.  With a NFA Trust, the trust technically owns the firearms, not the individual.  The individual is allowed to possess and use the weapon, but actual ownership belongs to the gun trust.

Be careful to avoid DIY gun trusts, gun trusts provided by gun dealers, or a gun trust form online.  While I appreciate the thought of saving money by getting a NFA Trust online, think of the consequences if the trust is not done perfectly.  For example, if your trust is invalid (and many, many DIY NFA trusts are invalid), then you are actually unlawfully possessing those NFA firearms.

I don’t know about you, but I wouldn’t want to risk losing a quarter million dollars and 10 years in prison–just to save a few hundred dollars in attorneys’ fees for correctly setting up the trust.

Trust me, good gun trusts are complicated documents.  In fact, many attorneys won’t even help with a gun trust due to all the particularities and huge risk involved.  There are Texas gun trust attorneys around, though.

Depending on the law firm, expect to pay $500 to $1,000 (maybe more) for a gun trust in Texas.  I charge even less than that for NFA Trusts in Dallas.  A valid gun trust by an attorney makes it so that you can lawfully possess NFA firearms, transfer them, and pass them on to beneficiaries when you die.

How much does a Texas NFA Trust cost from an attorney?  Contact Shutt Law Firm to get your low-price quote.  I will tell you what I charge, right over the phone.  214-302-8197.  Plus, I have made it a point to be among the more affordable NFA Trust Attorneys in Texas.

How long does it take to get your completed gun trust back from the attorney?  Less than a week in most cases.  The entire process can be completed through email and phone correspondence.

If you are in the Dallas area and interested in a Texas gun trust, you are welcome to contact Shutt Law Firm, PLLC for a free consultation.

Shutt Law Firm provides clients Gun Trusts in Dallas, Trusts in Richardson, Trusts in Plano, and throughout the DFW area.  Visit www.ShuttLawFirm.com for more information on Texas estate planning trusts.


Visit http://www.shuttlawfirm.com or email ishutt@shuttlawfirm.com.  You can also call Mr. Shutt at (214) 302-8197 for more information on the topic discussed in this blog or to discuss a different legal matter.  Phone-calls and quick e-mails are always free at Shutt Law Firm PLLC.  Please consider the Shutt Law Firm if you’re looking for a Richardson probate lawyer, Richardson wills lawyer, Richardson estate planning attorney, power of attorney in Richarson, or Richardson guardianship lawyer.

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DISCLAIMER:  Nothing in this blog post constitutes legal advice.  The information provided herein is merely provided in the spirit of education.  If you have a legal question, you should consult an attorney for your specific legal situation.   Further, nothing in this blog shall be construed to have started an attorney-client relationship.  No such relationship exists until you sign an engagement letter with the Firm.
http://www.ShuttLawFirm.com

The “Pot Trust”

What is a pot trust?  Should you have a pot trust in Texas?

A pot trust has nothing to do with marijuana or gardening.

There are many, many different kinds of trusts, and the “pot” trust is just one of those varieties.  As a refresher, a trust is a document that lays out legal relationships among the person making the trust (called the “grantor” or “settlor”), the person in charge of the assets contained in the trust (called the “trustee”), and the people who benefit from the trust (the beneficiaries).

People have trusts for a million different reasons.  One of the more common reasons to have a trust is to provide for minor children.  That is, if the parents of a minor child die, the children cannot legally inherit the parents’ property outright.  Should this happen, the local Texas probate court will likely have to set up a “guardianship of the estate” to give an adult the authority to accept the inheritance for the benefit of the child.  This guardianship process can be expensive and/or burdensome.  However, to alleviate this problem, parents can establish a trust for the benefit of minor children.

A trust for minor children in Texas is generally created in a parent’s Will (we call this a “testamentary trust”).  A Texas estate attorney can customize and tailor this trust to meet each parent’s goals for the trust.  For example, many parents don’t want the trust to simply give their kids a huge lump sum of cash automatically when the kids reach age 18.  Instead, they structure the trust such that the trustee can spread out the distributions until the child reaches age 25 or beyond.  This is especially useful to make sure the child has money to pay for a college education instead of wasting it on something else.

But what happens if both parents die with a trust, with one child age 18 and the other age 25.  Let’s say the trust has $100,000.  Let’s also say the 18-year-old is entering college and the 25-year-old has graduated college (and the parents paid for the college).  Do the parents want the trust to give each kid $50,000?  Split right down the middle–that seems fair, right?

It seems fair unless you’re the 18-year-old!  She has to pay for her entire college education even though her older brother didn’t!  This is where the pot trust is especially useful.

A pot trust puts all the parents’ assets into a single “pot” when the parents die.  The trustee of this pot trust has the power to make distributions for the benefit of any and aii of the children.  So, in our example, the trustee can pay the 18-year-old’s college tuition with the pot trust.  Then, when the youngest child hits a certain age, the pot trust either terminates and gives the remaining money equally to the kids or spins off into separate trusts for the benefit of each child individually.

In short, a pot trust creates one large trust for the benefit of several people, which may be preferable over the creation of smaller individual trusts.  To discuss which of the million varieties of trust is best for you and your family, talk to a Texas estate planning attorney.


Shutt Law Firm provides clients Trusts in Dallas, Trusts in Richardson, Trusts in Plano, and throughout the DFW area.  Visit www.ShuttLawFirm.com for more information on Texas estate planning trusts.


Visit http://www.shuttlawfirm.com or email ishutt@shuttlawfirm.com.  You can also call Mr. Shutt at (214) 302-8197 for more information on the topic discussed in this blog or to discuss a different legal matter.  Phone-calls and quick e-mails are always free at Shutt Law Firm PLLC.  Please consider the Shutt Law Firm if you’re looking for a Richardson probate lawyer, Richardson wills lawyer, Richardson estate planning attorney, power of attorney in Richarson, or Richardson guardianship lawyer.

 

DISCLAIMER:  Nothing in this blog post constitutes legal advice.  The information provided herein is merely provided in the spirit of education.  If you have a legal question, you should consult an attorney for your specific legal situation.   Further, nothing in this blog shall be construed to have started an attorney-client relationship.  No such relationship exists until you sign an engagement letter with the Firm.
http://www.ShuttLawFirm.com

Guardianship vs. Power of attorney in Texas

First, I have to remind you that guardianships and powers of attorney involve the courts of your particular area and your state law.  This blog provides information for people who want a little information on Texas Guardianship or a Texas Power of Attorney.

A guardianship and a power of attorney can do a lot of the same things, but they are created in very different ways and actually have many notable distinctions.   I want to start by sharing a brief snapshot of what each does.

A guardianship in Texas is a legal relationship between a “guardian” and a “ward.”  In the simplest terms, the relationship is kind of like the guardian has the same kind of legal authority a parent has over her child.  The guardian has the legal ability to make decisions on behalf of the ward, and the ward loses the legal authority to make decisions in those areas the guardian has authority.  So, for example, if a Texas Probate Court approves an application for a “guardianship of the estate,” the guardian will have the legal authority to deal with bank accounts (and many other financial decisions), and the ward will no longer have that authority.  As I’ve noted in a previous blog post, in Texas, there are two kinds of guardianship:  1) guardian of the estate and 2) guardian of the person.

So, what is a Texas power of attorney?

In Texas, there are many differentkinds of power of attorney, but two kinds are frequently used in wills and probate law offices:  1) Durable Power of Attorney, and 2) Medical Power of Attorney.

A Durable power of attorney is a legal document where one person (usually called the “principal”) gives another person (usually called an “agent” or “attorney in fact”) the legal power to make decisions in addition to himself/herself.  For example, if I appointed my wife as my attorney in fact, she could go down to my bank and make changes to my bank account.  In this example, I would also have the power to make changes to the bank account.

This power of attorney is called “durable” because it will remain in effect even if I become incapacitated.  This is a very good thing because I’ll most want a power of attorney when I’m incapacitated.  If your power of attorney doesn’t contain the correct wording, it won’t be “durable,” and the power of attorney will disappear automatically when you become incapacitated.

A medical power of attorney is simply limited to medical decisions.  So, for example, if you’re in the hospital and under the effect of anesthesia, your attorney-in-fact could make decisions about your medical treatment on your behalf.  You should give a copy of your Texas medical power of attorney to your health care provider to keep on file.

Now, that you have a very, VERY brief description of a Texas power of attorney and Texas guardianship, let me point out some of the main differences:

– broadly speaking, the guardianship is much more extensive and involved
– a power of attorney is cheaper, easier, and much faster to create
– guardianships require interaction and a hearing with a Texas Probate Court (in front of a judge)
– a power of attorney can be revoked at any time by the Principal (a guardianship cannot be revoked by the ward)
– the principal in a power of attorney does not lose his/her ability to make legal decisions, the ward in a guardianship does lose many (or all) authority to make legal decisions

There are many more differences, but you’ll need to find a guardianship attorney or probate attorney to discuss your particular situation.  If you have  a parent who’s getting older, it may be a good idea to contact a lawyer to see whether a power of attorney or guardianship is a better fit for you.  Keep in mind that free power of attorney forms or other online forms are not well suited for these issues.  These documents involve a person’s legal rights and should not be taken lightly.

As a final pointer, when you go see your estate planning lawyer to have your Texas will created, ask the attorney about power of attorney documents and also a document called a “Declaration of Guardian.”  The Declaration of Guardian is a document that tells the probate court your preferences for guardianship should you ever be declared incapacitated.  This is particularly helpful when you prefer that a specific person be named your guardian (or if you want to specifically exclude someone from becoming your guardian).  My law office in Richardson, TX provides all of these documents (Texas will, powers of attorney, declaration of guardian, and many others) in a reasonably priced package deal.  Visit www.shuttlawfirm.com for more info on my Richardson law offiice’s wills and flat rate planning packages.

 

Isaac Shutt is the Attorney/Owner at Shutt Law Firm PLLC.  Isaac Shutt is a Dallas Guardianship Lawyer and a Dallas Power of Attorney Lawyer.  Visit http://www.shuttlawfirm.com or email ishutt@shuttlawfirm.com.  You can also call Mr. Shutt at (214) 302-8197 for more information on the topic discussed in this blog or to discuss a different legal matter.  Phone-calls and quick e-mails are always free at Shutt Law Firm PLLC.  Please consider the Shutt Law Firm if you’re looking for a Richardson probate lawyer, Richardson wills lawyer, Richardson estate planning attorney, power of attorney in Richarson, or Richardson guardianship lawyer.

DISCLAIMER:  Nothing in this blog post constitutes legal advice.  The information provided herein is merely provided in the spirit of education.  If you have a legal question, you should consult an attorney for your specific legal situation.   Further, nothing in this blog shall be construed to have started an attorney-client relationship.  No such relationship exists until you sign an engagement letter with the Firm.
http://www.ShuttLawFirm.com

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A guardianship is a legal relationship between a “guardian” and a “ward”.  Texas guardianships are governed by the Texas Probate Code, Section 13.  Follow this LINK to see the State’s guidelines for a Texas guardianship.  Basically, guardianship is for situations in which you believe a family member (or close friend) is unable to take care of himself/herself.  Once the probate court names you as someone’s guardian, you’ll have the legal authority to take care of that person.

In a guardianship, the guardian is a person who agrees to make decisions on behalf of a ward.  Technically speaking there are two kinds of guardian — a “guardian of the estate” and a “guardian of the person”.  The guardian of the estate has the power and responsibility to make decisions regarding the ward’s finances.  The guardian of the person makes decisions about the ward’s day-to-day living arrangements, health care, etc.  Often, when people go to the probate court to start the guardianship process, they’ll ask the court to make them both guardian of the person and guardian of the estate.

Typically, a potential guardian will initiate the legal process to start a guardianship when an adult family member (like a parent) has been declared “incapacitated” by a doctor and/or court.  Also, parents caring for a child with a mental disability may apply for a guardianship when the child reaches age 18 so that the parents can continue being guardians over the child after the child legally becomes an adult.

The first step to getting a guardianship in Texas is to contact a guardianship lawyer.  In fact, the Texas Probate Courts will require you to have a guardianship attorney to go through the legal guardianship process.  Secondly, a guardianship lawyer can help you explore less restrictive alternatives to guardianship.  For example, depending on your situation, a power of attorney may be a better option than guardianship.

In a future post, I will discuss how you get a guardianship in Texas and describe the Texas guardianship process.  For now, I’ll just say that getting a guardianship is a fairly involved legal process involving your law firm and probate court.  That being said, if you’re thinking about getting a will, you might want to consider also having your estate planning lawyer provide you a document called a “Declaration of Guardianship in Advance of Need.”  This document allows you to name who you would like to be your future guardian in the event that you become incapacitated.

Isaac Shutt is the Attorney/Owner at Shutt Law Firm PLLC.  Visit http://www.shuttlawfirm.com or email ishutt@shuttlawfirm.com.  You can also call Mr. Shutt at (214) 302-8197 for more information on the topic discussed in this blog or to discuss a different legal matter.  Phone-calls and quick e-mails are always free at Shutt Law Firm PLLC.  Please consider the Shutt Law Firm if you’re looking for a Richardson probate lawyer, Richardson wills lawyer, Richardson estate planning attorney, or Richardson guardianship lawyer.
DISCLAIMER:  Nothing in this blog post constitutes legal advice.  If you have a legal question, you should consult an attorney.   Further, nothing in this blog shall be construed to have started an attorney-client relationship.  No such relationship exists until you sign an engagement letter with the Firm.
http://www.ShuttLawFirm.com

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Besides being female celebrities, what do the late Jacqueline Kennedy Onassis and Amy Winehouse have in common?  They both could be commended for their estate planning.

Why should Jackie O be commended for her estate planning?  As an article in the NY Times (HERE) points out, her will, especially its use of the “charitable lead trust” stands tall in the world of estate planning.
A charitable lead trust distributes money to some charity annually for a set number of years (Jackie O’s charitable lead trust will last a total of 24 years, ending in 2018).  As time goes along, the trust’s principal also accumulates income.  So, at the end of the trust’s term, there may be leftover money to distribute to heirs.
Therein resides the beauty of a charitable lead trust.  You get to give a lot of money to some charity that you love AND to your loved ones.  AND, if structured properly, this can all be accomplished with no estate tax consequence.
So, how does money in the charitable lead trust make it to your loved ones tax free?  Each year, the IRS sets a “hurdle” rate.  The hurdle rate is the percentage at which the IRS expects assets to grow.  Anything over the hurdle rate can generally be passed to heirs tax-free.  Right now, because the economy is not doing so well, the IRS has set the hurdle rate exceptionally low, which means there’s great potential for giving a sizable tax-free gift to your hers.
All trusts have pros and cons.  The charitable lead trust is no exception.  The biggest problem with the charitable lead trust is that it is irrevocable.  Generally speaking, every trust is either revocable or irrevocable.  With a revocable trust, the person creating the trust (the “grantor”) can amend the trust while he/she is alive.  Conversely, irrevocable trust’s can’t be altered.  This can be a problem for many grantors because, as life goes on, you may want to change the trust beneficiaries, etc.
Another problem with the charitable lead trust is that they are very complex, so it can be difficult to get your charitable lead trust to do exactly what you want it to do.

Why should Amy Winehouse be commended for her estate plan?  Because she had one!  She was only 27 years old when she died in London, and she had a will.  Amy’s will splits her $16 million estate among her mother, father, and brother.  Click HERE for more information on Amy Winehouse’s will.
Most Americans die without a will.  And, of those individuals who are wise enough to get a will before passing away, many would tell you that they should have gotten one much sooner.  You will sleep better with a will because you don’t know exactly how long you’ll live.  Getting a will is probably easier and less expensive than you think.  You’ll probably live for years to come, so why not live out all those years sleeping better at night?

Isaac Shutt is the Attorney/Owner at Shutt Law Firm PLLC.  Visit http://www.shuttlawfirm.com or email ishutt@shuttlawfirm.com.  You can also call Mr. Shutt at (214) 302-8197 for more information on the topic discussed in this blog or to discuss a different legal matter.  Phone-calls and quick e-mails are always free at Shutt Law Firm PLLC.  Please consider the Shutt Law Firm if you’re looking for a Richardson probate lawyer, Richardson wills lawyer, Richardson estate planning attorney, or Richardson guardianship lawyer.
DISCLAIMER:  Nothing in this blog post constitutes legal advice.  If you have a legal question, you should consult an attorney.   Further, nothing in this blog shall be construed to have started an attorney-client relationship.  No such relationship exists until you sign an engagement letter with the Firm.
http://www.ShuttLawFirm.com