By: Coleman Jackson, Attorney & Certified Public Accountant
May 1, 2023
So many Americans died during the Covid-19 Pandemic! Many families learned during this period of hardship and lost that estate planning and asset protection is not merely for the powerful and well-to-do but is for everyone. You see, we are not born to stay here and everyone need to plan their exit most importantly spiritually but also temporally. We are all passing through. We are all fellow travelers on this journey towards life. We form relations; we impact other’s lives for the good or bad; we amass property and other things during this journey. Estate planning embodies our goals and objectives as to how we desire to protect our love ones and pass our personal legacy and property and things to our love ones, charities and whoever else we choose. Estate Planning allows us to choose when beneficiaries inherit or receive our wealth. Estate planning allows us to plan for incapacities that might come our way. Estate Planning and Asset Protection is very important. It is the responsible thing to do!
Many Americans learned during Covid-19 that they or their love ones failed to properly plan for being incapacitated for long-periods of time or their sudden deaths. Many Estate Planning, Tax and Asset Protection Lawyers have seen an uptick of families and individuals with these type matters on their heart and in their minds these days. They are determined not to make the mistakes of their elders in failing to plan for their incapacities and demise. I think the public needs to know about asset protection and estate planning.
That is why I am writing this blog on estate planning and asset protection today. It will be published and free of charge to anyone who goes to our law firm’s website www.cjacksonlaw.com and click on our blog page. Incapacity, death and taxes impacts all of us one way or another eventually regardless of our economic station in life, or our cultural background or any other particular as it relates to us.
What is Estate Planning and Asset Protection:
- Definitions: Estate Planning– Proper estate planning allows you to plan for yourself and your loved ones (which include your family, your church and community) without giving up control of your affairs. Your estate plan should allow for the possibility of your own disability. It should give what you own to whom you want, when you want, and the way you want at the least amount of costs.
Estate Planning is so important that you cannot afford not to do it and when you do it you cannot afford not to hire competent legal representation. Estate Planning and Business Structuring are state specific which means that state law impacts your estate plan. That means that if you are a resident of Texas; you should strongly consider hiring a lawyer licensed in Texas. Federal tax law is implicated so you should consider hiring a lawyer skilled in the relevant sections of the Internal Revenue Code.
Some general things you could possibly talk to your estate planning lawyer about during your initial consultation:
There are five common ways to pass assets to your intended loved ones –
- Beneficiary designations (e.g., life insurance, pensions, IRAs, etc.)
- Joint property arrangements
- Life estate deeds
- Non-probate Assets
- Joint tenancy with right of survivorship
- Payable on death accounts
- Joint Accounts
- Life Insurance
- Tax Issues– The specter of taxes is always there (so, you cannot ignore the tax ramifications of dying. Some of the basic tax considerations that you need to discuss with your estate planning attorney about during your initial consultation are as follows:
- Federal Unified Tax Credit
- Estate Taxes
- Gifts and gift tax
- Community Property vs Separate Property—Texas is a community property state and the impact of that reality on estate planning cannot be underestimated.
- Property Taxes—Texas property taxes are some of the highest in the nation. Many elderly people fall behind on their property taxes and lose their property due to delinquent taxes. And often time those who inherit property in Texas is unaware of these delinquent tax problems until they are faced with foreclosure procedures. Due diligence is required to investigate the various ways property of an estate is encumbered.
Some more things to talk about during your initial consultation with your estate and asset protection lawyer. It is very helpful if your estate planning and asset protection lawyer is schooled in federal tax issues because federal taxes are always around potentially impacting the value of your estate. You should consider asking about—
- Importance of Having a Will
- Basic Types of Wills
- Community property laws in Texas
- Will and testamentary trust
- Special provisions and things unique to you
- Execution of Wills
- Revocation of Wills
- Effect of Divorce on Wills and Trusts and Community Property
- Effect and Implication of Immigration Status, the United States of America is a land of immigrants and many immigrants have family, business interest and property in their native countries; therefore, effective estate planning and asset protection must consider these facts and circumstances. Pre-immigration planning in some cases is critical. Immigration status cannot be ignored in estate planning and tax planning.
What else might you consider bring up during your initial consultation with your estate planning and asset protection lawyer.
- Ancillary Documents: So, what are these all about? Dying is not all you have to think about. During Covid-19, folks were in the hospital for months-and-months-and months. Who was to handle their household affairs? Who was to handle their business affairs? Who was to take care of their minor children? Incapacity issues are also part of effective estate planning and asset protection. Estate planning is about planning for your being unable to care for yourself, your minor children and your financial affairs. Some tools estate planning lawyers use in consideration of your incapacity to act for yourself are as follows:
- Durable Powers
- General Powers
- Special Powers
- Revocation of POAs
- Health Care POAs
- Directive to Physicians
- Creation of trusts
- Purpose, Types and Taxes with respect to Trusts
- Community Property Agreement and Pour-over Will
- Crummey Powers
- Termination of the Trusts
- Marital and Bypass Trusts
- When Trust are not advisable
- How Trusts work
- Living Trust
- QTIP Trusts
- Charitable Remainder Trusts
- What about Long-Term Care? (Elder Care, such as Social Security, Nursing Homes,
SSI, Medicare, Medicaid and Hospice). These matters too are addressed in comprehensive estate and asset protection.
CONCLUSION: ESTATE PLANNING AND ASSET PROTECTION IS NOT ABOUT THE DOCUMENTS
Estate planning is not about the documents! Estate Planning is all about your goals and objectives in passing your legacy, values and property to who you want and how you want and when you want with the least amount of spillage such as for taxes, court costs and other expenses as possible. It is dangerous to pull documents off the internet or obtain them from friends, relatives or others because law is complicated and what you find on the internet or elsewhere might not accomplish your goals and objectives. A counseling attorney is critical for effective estate planning, tax planning and asset protection. These plans need to be within the bounds of all applicable international, federal, state and local laws and ethical principles. What are your goals and objectives in such matters as these?
This law blog is written by the Taxation | Litigation | Immigration Law Firm of Coleman Jackson, P.C. for educational purposes; it does not create an attorney-client relationship between this law firm and its reader. You should consult with legal counsel in your geographical area with respect to any legal issues impacting you, your family or business.
Coleman Jackson, P.C. | Taxation, Litigation, Immigration Law Firm | English (214) 599-0431 | Spanish (214) 599-0432 | Portuguese (214) 272-3100