This is part one of a three-part blog series discussing Special Needs Trusts. Over the next few weeks, we invite you to follow along as we offer a brief overview of the basics of Special Need Trusts and alternative methods to Special Need Trusts.

According to a study funded by the National Institute on Disability and Rehabilitative Research, it is estimated that over 56.7 million Americans are disabled. This number represents approximately 18.7% of the entire population of the United States (303.9 million per the 2010 U.S. Census).Of these individuals, approximately 38.3 million suffer from a severe disability (about 12.6% of the population), and about 12.3 million people aged 6 and older need assistance with one or more activities of daily living.The number of Americans with disabilities is expected to increase as the U.S. population ages. In light of the growing number of Americans with a disability, the need for special needs planning, as well as the establishment and administration of special needs trusts, is growing.

Individuals looking for guidance on maintaining or planning for public benefits often secure the help of an attorney to draft a Special Needs Trust (“SNT”). Generally, governmental benefits are designed to provide for the basic necessities of an individual such as health care, food and shelter. So, governmental benefits provide for only the minimal needs to recipients. A SNT is designed to provide additional needs and extras, like vacations, that normal governmental benefits do not provide. A SNT can either be self-settled or third-party settled depending on the source of the funding of the Trust.

The purpose of a Special Needs Trust (“SNT”) is to preserve the governmental benefits of the beneficiary while also providing a source of funds available to the beneficiary for supplemental needs. More specifically, the purpose of a self-settled SNT is to avoid both the imposition of a period of ineligibility for SSI or Medicaid because of the transfer of the resources to the trust, and the treatment of the trust as a resource for SSI or Medicaid eligibility purposes. Typically, self-settled trusts are used in tort recovery or settlements, inheritance received by the beneficiary outright (i.e. not in trust) or to hold equitable distributions in divorce or alimony payments.

Third-party SNTs permit a parent, grandparent or other person to provide for the needs of an individual with a disability that are not being met by public benefits. Therefore, in order to avoid a mandatory pay-back provision required in self-settled SNTs or to avoid the loss of public benefits, any bequest or gift to an individual with disabilities should be made via third-party SNT.

Takeaway: When establishing or administering a SNT, it is important to correctly determine the source of the funding (i.e. self-settled or third-party funds). A catch-all trust that includes both self-settled and third-party funds is prohibited. Third-party funds should never be comingled with a self-settled trust, and vice versa.

We will have our next installment in this blog series posted soon. In the meantime, if you would like to learn more about Special Needs Trusts, contact Weldy Law, PLLC, for a free initial consultation.

This blog is for informational purposes and does not provide legal counsel nor does it establish an attorney-client relationship.

For each of us, at times in our life, death happens. Whether it’s getting the heart-stopping news that someone we know (and, often, someone we love) has died or even the end of our own lives, each of us will have several experiences with end-of-life issues. While in the gulf of grief generally experienced during this time, we typically begin to evaluate steps that need to be taken to legally deal with property or other issues related to the deceased person. And for some, quickly taking action to settle the estate is a way of trying to resolve grief. Unfortunately, sometimes fast action can produce harmful and unintended consequences.

Noted here are a few important guidelines that survivors should follow to safeguard the estate and their loved one’s interests.

Avoid Rash Decision Making. No matter what, make yourself a simple deal that you won’t make any decisions (or promises) about money or property for the first week or two (or as long as you’re feeling the waves of emotion). Though it may seem obvious, a great many people make promises to family or friends about the deceased’s assets that they feel they can’t back out of once they come to their senses. To avoid regret over hasty decisions regarding giving family members or friends certain assets out of the estate, simply tell anyone who asks that you just want to honor the deceased by keeping the time immediately after his/her death dedicated to their memory and that you are available to talk “business” at a later more appropriate time.

Locate and Secure Important Legal Documents. In a situation where the deceased had executed a Last Will and Testament, if possible, find and secure the original document. If you are the next of kin or person named as the executor of the estate, it’s important you take possession of the documents as soon as possible. If you’re the surviving spouse or child of the deceased, hopefully, you will know where your family member kept his/her documents. If so, take possession and put them in a secure place until you can review them with a qualified attorney.

Don’t Give Away (or Take) Property. Occasionally, surviving family or friends give away or take an item of property of the deceased as a token of their relationship. While it is understandable to want a keepsake (or to be generous and give away such keepsakes), the law is clear that the property of the deceased is estate property and subject to the claims of any creditors. Accordingly, the most sensible route is for everyone to hold off on taking such mementos until the personal representative of the estate is sure that no creditor’s claims exist or that they may be satisfied by other assets.

Consult a Qualified Attorney. Probate law is often more complicated than it appears on the surface. Even in families that genuinely love one another and get along well, conflicts may arise in situations where family members feel that one person is being favored over another or where the parties involved don’t understand the legal requirements of estate administration. To avoid family conflict (or settle conflict) as well as safeguard the estate and parties involved against claims by creditors, you should contact a qualified probate attorney and remember that time is of the essence. If any situation arises where parties involved begin to argue over assets, bringing in a lawyer may help quickly restore peace and resolve the conflict while hopefully maintaining the familial relationship intact.

Do you have more questions regarding the next steps on what you should do after a loved one has passed? Weldy Law, PLLC is here to help, contact our offices to schedule a consultation.

The above blog is for informational purposes only and is not legal advice nor does any information or communication with this website create an attorney-client relationship.

You’re out and about shopping at one those big-box stores and you see a brightly colored display advertising the latest software for do-it-yourself wills and estate planning. Or maybe you’re online, reading about what a trust is and why you might need one, when a pop-up ad comes onscreen and advertises a cheap, easy-to-use solution…so easy, right? You know that you need to do some sort of estate planning but the thought of attorney fees make you cringe. Unfortunately, going cheap on a DIY solution can be even more frightening for you and your family.

Drafting a will or creating an estate plan isn’t a simple process – there are numerous moving parts, obscure assets, and scenarios to be considered – and this plug-and-play method gives individuals a false sense of security in that they have somehow sufficiently planned for the end of their life and the division of their assets.

So, here’s why hiring an estate planning lawyer is a better choice than DIY software:

Individual consultation

Meeting with an attorney one-on-one will help you eliminate a lot of the common mistakes people make with DIY wills.

Some websites have will-writing software; they also require joining a monthly plan to have a licensed lawyer review whatever you create. That’s fine, but I’d caution this move as most states have different estate laws and there’s no guarantee whoever reviews your will is up-to-date on the latest laws (they change frequently). I still think a better option is to meet personally with someone who gets to know you, talks with you, and points out things that are missing from your will.

Detailed and Customized

When the check engine light in your car comes on, you take it to a mechanic. When your computer starts running slow, you usually call tech support. Every day we seek the opinion and advice of qualified professionals to do things we can’t do ourselves. Why should writing a will be any different?

Over the years, I have heard and read plenty of horror stories with a DIY will:

• the woman who left her fortune to her pet, but not someone to care for the pet (who can’t legally own property or open a bank account)
• the father who didn’t want his drug-addicted son to get a dime but forgot about $400,000 in stock options his son received anyway
• the mother who didn’t specify which of her three children received which heirlooms and, after three years in probate, those items were auctioned off and are no longer in the family

An attorney’s objective is to pay attention to each detail. Your estate planning attorney will also be able to step back and see “the big picture” and help you address issues you haven’t even considered.

Likely Less Expensive than You Think

You might save on a DIY will initially, but it could get expensive for your loved ones after you’re gone if they’re left addressing any issues that arise from an ‘over-the-counter’ generic will.  Money does weird things to people when we least expect it: A surviving spouse moves to withhold part of your inheritance from your adult children, a daughter won’t share with a step-brother because he wasn’t named in the original will, or a son sues his stepmother for a larger piece of the estate. Having a thorough, clear-cut will or estate plan eliminates most of those gray areas, and saves family members from the pain of hurt feelings, vindictive actions, and seeing portions of their inheritance go toward legal fees. Additionally, you’re making the decision who gets what when you pass away, not a judge or a mediator.

Utilizing a well experienced estate planning attorney to draft your estate plan will allow you to have one less worry as you begin writing the next chapter of your life.

If you would like to learn more about creating a customized estate plan that fits your needs, give Weldy Law, PLLC a call and schedule a free initial consultation.

The above blog is for informational purposes only and is not legal advice nor does any information or communication with this website create an attorney-client relationship.

One problem that we see frequently is families who have children (or other potential beneficiaries) who have an issue with addiction, or suffer from extreme irresponsibility, lack of financial discipline, or severe laziness. The point is that most families have at least one of these issues when considering their Estate Plan and how to not only pass their property but also who to charge with the task of handling their estate when they pass away.

For purposes of estate planning, understanding that all of the issues above typically result in the same general dilemma for the parents: the difficult question of how to deal with their estate planning. Typically, parents/grandparents want to provide a legacy for their family, provide adequately for their loved ones, but not harm them. The prospect of gifting any significant amount of money or assets to a family member who can’t handle it brings uneasiness to many people considering creating an Estate Plan and how to best address their property distribution upon passing away.   

Fortunately, estate planning attorneys have options to help families that struggle with these situations. There are various methods of passing on your property that you have spent a lifetime establishing, without harming your loved ones. Ways to accomplish this goal include but are not limited to utilizing trusts to provide gifts that can be overseen by a trustee, working with other reliable family members, or requiring that certain conditions are met by beneficiaries in order to inherit.

Key Point: There are Options. And an experience estate planning attorney can help you explore those options and create an Estate Plan that is customized to meet your needs and goals.

There is no need to avoid having your estate plan completed because you are worried about this kind of situation. If you are in a family that struggles with this kind of issue and need help completing your Estate Plan, call us today. At Weldy Law, PLLC, we are experienced in planning and can guide you through a simple, cost-effective process to resolve these issues. 

The above blog is for informational purposes only and is not legal advice nor does any information or communication with this website create an attorney-client relationship.

Estate Planning is one of the most basic legal needs individuals have. Still, even with the broad availability of legal counsel, research shows that over half of Americans still don’t have a plan in place. If you’re one of those individuals without a plan, you should consider having a custom estate plan created to fit your personal needs. 

Here are 3 reasons why:

• Having a Will is Usually Easier to Probate: Without going into extensive detail on probate law, you should generally understand that having a Last Will and Testament may be simpler and less expensive to probate than a situation where you have no advanced planning done at all. While some state laws vary, the law of Texas provides that if you have a Will that calls for “independent administration” of your estate, the Court will generally allow your personal representative (“Executor”) to work through your property and creditor issues without being supervised by the court this saves time and money. While there can be exceptions, it is generally easier and less expensive to probate a simple, self-proving Will that calls for unsupervised administration rather than having no planning at all.
• The Law Doesn’t Know (and Simply Doesn’t Care) About Your Wishes: If you die without a Will in place, under Texas law there is a “default” plan that gives your property away to your next of kin, this is called “Intestate.” The default plan does not take into account your relationships with those people, your wishes, or even specific concerns related to them.

Example: When you were young, you have a child with a significant other. The child moves away with the other and you don’t have a close relationship. Later in life, you get married. If you die unexpectedly without a Will, your property is divided between your spouse and the child. This can create a large financial burden for the surviving spouse.

• Blended Families = Additional Complication: If you’re one of the many Americans living in a blended or non-traditional family, you may find that there are legal implications to your family arrangements. Perhaps you were previously married or have children from a prior marriage. Maybe you live with (or are married to) someone with children from a prior marriage. Maybe some of these children are minors. The key here is that if you are in a situation where you (or your spouse) have children from a prior marriage or relationship, they can potentially inherit along with your spouse. If those children are minors, their other natural parent typically has the right to speak for them regarding their property interests.

Example: You were previously married and had a child. You divorced and now are re-married with another child (a child with your second spouse). If you die without a Will, your spouse and child from your prior marriage split your assets (but if the child is a minor, your ex-spouse may have a right to speak for your first child).

Contact a qualified attorney to create a basic estate plan. Our firm frequently works with clients ranging from young families with modest estates to more established individuals with complex trust estates. We want to help you easily and efficiently resolve your estate planning issues. 

If you would like to learn more about creating a customized estate plan that fits your needs, contact Weldy Law, PLLC to schedule a free initial consultation. 

The above blog is for informational purposes only and is not legal advice nor does any information or communication with this website create an attorney-client relationship.