Key Takeaways:
- You will not lose control of your assets if you place them in a trust. On the contrary, you will have full control over your assets.
- It is essential for everyone to have several healthcare planning documents in addition to a will/trust, including a durable power of attorney, a medical power of attorney, an advanced directive, and a HIPAA authorization form.
- You should review your healthcare planning documents every five years, and/or whenever there is a major change in your life/in the lives of your beneficiaries.
- There are means of protecting your business as well as your personal assets through estate planning, including.
placing your business in a trust and putting business succession documents in place. Much of estate planning for business purposes will have to do with your operating company agreement and the structure and nature of your company.
No, you will not lose control over any of your assets if you put them in a trust. Quite the contrary, in fact.
Almost all grantor trusts say that the grantor trustees can use what is called their “unbridled discretion” to take assets out of the trust and give it to the anyone or any entity they wish.
Grantors can also put new things in the trust. For example, if you buy a lake house, you can put that house in your trust. That way, when you die, you avoid probate. Your beneficiaries retain use of the lake house according to the trust agreement.
The trust basically gives you a shelter from others seeking to extract your assets from you. You pretty much have full and complete control on your assets.
Let’s Talk About Healthcare Planning Documents That Everyone Should Consider Having In Texas. What Do You Recommend?
Everyone needs to have several documents to protect themselves, their wishes, and their loved ones for the remainder of their life and after their death.
One of those documents is called a Durable Power of Attorney. This document appoints someone who can take over your affairs if you become mentally incapacitated. This document allows the person holding the power of attorney to continue to conduct your business for you.
Usually, powers of attorney are utilized when a person is in ill health, suffering from dementia or Alzheimer’s, or even going into a coma/vegetative state, and cannot care for themselves.
With a power of attorney, someone you trust and who you chose for this task can handle your daily business and living activities, notwithstanding the fact that you’re in a hospital or under surgery or whatever.
In addition, I recommend that people also get a specialized Medical Power of Attorney. A medical power of attorney allows someone to make medical decisions on your behalf, if you are incapable of doing so for themselves.
Notably, medical powers of attorney work somewhat differently in Texas. Specifically, it only becomes effective when a doctor has certified that the person is no longer able to take care of themselves.
Another important document that everyone should have in Texas is an Advanced Directive also known as a Do Not Resuscitate Order. This essentially deals with what measures you want or do not want to be put in place to keep you alive in different medical scenarios.
With an advanced directive, any clinic or hospital or emergency room will know that if you medically meet the conditions of the advanced directive, they should simply keep you comfortable and allow you to slip away peacefully. This is largely for people who don’t want to be on feeding tubes and oxygen tubes and if their quality of life declines.
It’s also good to have a Designation of Guardians. This is a way of telling a court that if someone must be appointed your guardian, it should be this specific person or one of these specific people.
A guardian is usually only appointed to help someone make decisions on their own behalf when they cannot do so for themselves. This may happen when someone has Alzheimer’s, or they’ve had brain damage, or they are otherwise impaired and therefore they really can’t make decisions for themselves.
You will want to think carefully about who you designate as a potential guardian. While this designation is not legally enforceable, it is followed 95% of the time when a court is asked to place a guardian.
Yet another document that everyone needs a HIPAA Authorization Form. This document identifies the people that you want to have access to your medical information, allowing medical professionals to bypass HIPPA restrictions to inform the people. You list details about your medical condition.
I joke about the fact that when my daughter went to college—college that I was paying for, driving a car that I paid for and using gasoline that I paid for—she had to go to clinic, and they took care of her. They sent a bill and it came to me, and I wanted to know what it was about, so I called them and asked. They said “Well, you don’t sound like a young girl”. I said, “I’m not, I’m the dad, and you’re not going to get paid if I don’t know what’s going on here.” They said, “Well, under HIPAA, we can’t tell you unless you have written authorization”. So, I paid it and went on about my business.
Fortunately, this was not a real issue for me. However, you often find even only slightly dysfunctional families who don’t have anyone who is authorized to get that information. This is why we prepare the form, and we always give everybody hard copies and PDF copies so they can email or anyone can email on their behalf. All that is necessary is to send a HIPAA authorization saying ,“Hey, John, Bill and Sue are authorized to get my medical information”.
How Often Do You Recommend People Revisit Or Review Their Estate Planning Documents?
I recommend that people revisit their estate planning documents every five years. The only major reason that you see a need to modify those documents any more frequently than that is if there’s been some major change.
Usually, people call me up and say their will is 10, 20 years old. They’ve remarried and they’ve changed their name and they’ve moved, or maybe they’ve had kids or fallen out with previously designated beneficiaries.
It should be noted that changing your name and moving to a new house doesn’t in and of itself affect any of the planning documents that we put together. But, for example, if several of the named beneficiaries in your will have died, you may want to restructure your gifts.
We recommend that people look at their estate planning documents every five years. This is good to do if only to make sure you’ve got all the right people in all the right roles, and to make sure all the beneficiaries are still the ones you want to get all your stuff.
Are There Ways To Help Plan Or Protect My Business Through Estate Planning?
Yes, there are ways to help protect your business through estate planning.
One of the ways you can use estate planning to protect your business is by putting your business in a trust. Then, when you die, the trust says who takes over the business. You can also put business succession documents in place that do that same type of thing.
When a client comes to me saying that they want to protect their business, the key question is really how big of an interest they own in their company, and how effectively the company can continue to operate once they die.
So, if you have 500 employees, what are you going to need to have the company go on without you? Your operating company agreement and your bylaws really are going to speak to that and take care of it in the end.
What your death will ultimately mean to your business is that someone in your family or someone that you trust is going to own your interest in the company, but not necessarily become the new CEO or CFO.
For more information Losing Control Of Assets Placed In A Trust, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (281) 843-9723 today.