Many folks I have counseled tell me they have added a trusted adult child to their financial accounts.  Their reasoning is that it gives the child access to help them. That is a perfectly reasonable step to take, but it is important to consider the ramifications, especially as it may affect federal deposit insurance for accounts insured by the Federal Deposit Insurance Corporation (FDIC). Of course, another overriding consideration having more to do with human nature than federal regulations is whether there is a trusting relationship between or among everyone whose name is on an account.

Joint Bank Accounts

Under FDIC rules, a joint account is a deposit account owned by two or more people who have equal rights to withdraw all of the deposits and to close an account. Married couples, assuming they want to share the funds in the account, like the convenience of such a joint account so that either person can write checks on the account and pay bills from it. At an FDIC-insured institution, each co-owner is insured for up to $250,000 for his or her share in all joint accounts in that institution. But if all persons on the account do not have equal withdrawal rights, the account will not necessarily be FDIC insured up to the same amount as for a true joint account under FDIC rules.

A significant risk exist when you add another to your account, it puts your assets at risk.  I often consult with clients who have added a child to their account.  While they may have complete trust in that child, there are factors that should be considered.  If you have added a child to your bank account and that child is sued as the result of an accident, divorce or contract dispute, those attorneys do not care that the account is yours.  Likewise, if your child is audited, the Internal Revenue Service will not care that it is your account.  Another example is if that child is hospitalized and can’t pay their bill.  If they are on your accounts, the attorneys for the hospital can place a lien against your account with the child’s name on it.  These are all real life experiences I have dealt with.

If the goal is to give someone limited access to a bank account when needed but not to grant ownership rights to the account, an alternative is to grant that person a power of attorney. Powers of attorney, which typically authorize someone to represent or act on another’s behalf in financial matters, can be crafted to permit the desired amount of access to bank accounts.

Credit Card Accounts

There are two different ways to give a second person the ability to use a credit card. Making that person a co-owner means that he or she will be financially responsible for all of the debt incurred with the credit card, regardless of which co-owner authorized a particular charge. In the alternative, an authorized user of the card may or may not be financially responsible for the debt, depending on the cardholder agreement. The card owner can put restrictions on authorized users, such as how much debt the authorized user can incur with the card.

Cosigning Loans

Succinctly put, a cosignor on a loan has agreed that the creditor can look to him or her for satisfaction of the debt if the debtor does not pay the debt. This obligation may well extend to any late fees and collection costs made necessary by the debtor’s delinquency. On top of that, the cosignor’s own credit rating could take a hit if the debtor doesn’t pay the debt or pays it late. All in all, the watchwords for cosigning on a loan are “proceed with caution.”

If you want someone to assist you with paying bills or managing your accounts, then you should consider talking to an attorney about the benefits of a Durable Power of Attorney.  Additionally, seeking legal advice before you cosign on a loan, would be a wise decision.

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If you’re planning a vacation, sending kids off to camp, or just enjoying a slower season at work, now is the perfect time to get your legal and financial life in order. There are a few reasons why summer estate planning makes sense.

You’re Already in Planning Mode for Summer Activities.  Whether you’re organizing a family road trip or coordinating childcare while school is out, summer naturally puts you in the mindset of preparation.

That makes it easier to shift gears and think about your estate planning checklist:

            – Who would care for your children in an emergency?

            – Who would make decisions if you became seriously ill or injured?

            – What happens to your assets if something unexpected occurs?

Estate planning answers all of these questions, so your loved ones aren’t left guessing during a crisis.

Travel Season Highlights the Need to Update Your Estate Plan.  Before you pack your bags and board that flight, take a moment to ask: If something happened to me while I was away, would my family know what to do?

We all hope nothing ever happens, of course, but travel brings a natural reminder that life is unpredictable. Putting basic documents in place can offer huge peace of mind while you’re away:

–  Will: Directs distribution of your assets

– Power of Attorney: Authorizes someone to handle financial matters

–  Healthcare directives: Ensures your medical wishes are followed

Summer Is Ideal for Estate Planning Updates and Reviews.  Already have an estate plan? Summer estate planning season is perfect for essential updates:

–  Review your beneficiaries after major life changes

–  Check your guardianship designations as children grow older

–  Make updates after marriage, divorce, a new child, or a move

–  Verify account information and contact details

Your estate plan should grow with your life. Regular reviews ensure it still reflects your current wishes and circumstances.  A good rule of thumb is review these plans every 5 to 10 years.

Flexible Summer Schedules Make Estate Planning Easier.  Many people find it easier to attend meetings or complete paperwork during summer’s slower pace—especially if you work in education, have summer Fridays, or are taking some time off.

Creating or updating your estate plan doesn’t take as long as you might think. Most estate planning checklists can be completed in a meeting with your attorney, making summer the perfect time to tackle this important task.

Complete Your Estate Planning Before Fall Gets Busy.  We all know how fast the fall can fill up, back-to-school preparations, sports seasons, and holiday planning. Taking care of your summer estate planning now means you can step into the busy season with one major task already accomplished.

Don’t let another year pass without proper estate planning protection for your family.  ©

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Most of us have adjusted to balancing children, work and finding some time for ourselves.  But when we add caring for aging parents, it often becomes too much.  And usually it’s the “me” part that is sacrificed…until you hit burn out.

Here are some ways to leverage your time and resources so you can also take care of yourself.

Enlist Your Kids

Even the smallest child can spend charming one-on-one time with a grandparent.  If your parent lives with or near you, they can spend time together in person.  If your parent is not near you, they can Skype on the computer, use FaceTime or play multi-player online games.  Your children, no matter what their ages, will benefit from spending time with Grandma or Grandpa, they will see how you value and care for aging family members—and you will get some extra time to return phone calls, make dinner, or even catch a quick nap!

Ask About Options at Work

Check with your employer’s human resources department about resources that might be available to you. Depending on how long you expect to be caring for your parent, there may be a multitude of options available to you, including elder care research and referral services, flex time, even working from home options.  The Family and Medical Leave Act (FMLA) calls for eligible employees to receive 12 weeks of unpaid job-protected leave. (Private employers with less than 50 employees are exempt.)

Seek Assistance

There are legal and community resources that can help you make the best care and financial decisions for your parent.  A local Elder Care attorney can prepare the necessary legal documents and help you maximize your parent’s income, long-term care insurance and retirement savings, and qualify for VA or Medicaid benefits, if applicable.  He or she will also be familiar with various living communities in the area and in-home care agencies. You can also hire someone to review and verify or dispute insurance claims and medical billing.

Find Your “Me” Time

Stress is your biggest enemy and you have to find ways to reduce it.  Joining a caregiver group, in person or online, will let you share your questions and frustrations, and learn how other caregivers are coping.  Don’t be afraid to ask favors of friends and relatives, such as picking up your kids while you go to the doctor with your parent.  You could also learn to order in dinner every now and then without feeling guilty. Learn what you need to maintain your stamina, energy and positive outlook. That may include regular exercise (a yoga class, walk or run), a weekly outing with friends, or time to read or simply watch TV.

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1. Make sure the EIN is being obtained directly from irs.gov.  This seems obvious, but it is helpful to those unfamiliar with the IRS website.  Be aware a Google search of “obtain EIN online” could lead to unwelcome results such as websites of companies that offer to collect your information (and sometimes a fee) to obtain an EIN for you.  An EIN can be obtained from irs.govinstantly and at no cost. There’s no need to pay a fee or disclose personal, identifying information through any other website.
2. Confirm that appropriate legal authority exists before obtaining the EIN. An EIN should not be obtained before an executor or trustee has legal authority with respect to the estate or trust; therefore, the application should be made once the executor has been appointed and qualified as such or once the trustee has formally accepted trusteeship.  To qualify, an executor must take a sworn oath for example.  While the IRS website does not ask for this proof, it is necessary if audited.
3. When applying for an EIN for a trust, note that the IRS currently provides 18 different types of trusts to choose from.  Choosing the right one matters.
4. You will be asked if the estate will use a fiscal or calendar year.  You should select the ending month that will give you the longer tax year.
5. Make sure the name of the decedent matches the probate records. When applying for the EIN of an estate, use the Decedent’s name exactly as stated in probate records. Doing otherwise could cause problems for the executor when the executor attempts to open a bank account in the name of the estate.
6. Make sure the name of a trust matches the name as indicated in the governing instrument.  As with an estate, you will want to make sure the name of the trust you list on the EIN application is consistent with the name of the trust as indicated in the governing document.
7. Be aware that the IRS typically will not give the same responsible party more than one EIN on the same day.  The IRS typically limits the number of EINs a responsible party can obtain on a given day, with the current cap understood to be one.
8. If wires got crossed and two EINs were obtained for the same trust or estate, you must contact the IRS right away.
9. Know when you might need an EIN for a grantor trust.  For many grantor trusts, an EIN will not be needed for the trust while the grantor is still living because the grantor’s social security number will effectively serve as the trust’s EIN, and the trust income will be reportable to the grantor.  This is also true when a grantor trust has two grantors who are married and file their income tax returns jointly, as the trust income is reportable on their joint return.  However, if the trust has two grantors who are not married to each other or who are married to each other but file separate income tax returns, the trust will need its own EIN.
10. Consider who the “responsible party” is. The EIN application will ask who the “responsible party” is for the trust or estate. The “responsible party” is the person who ultimately owns or controls the entity or who exercises ultimate effective control over the entity. For an estate, it follows that the responsible party is the executor or administrator.  For trusts, the responsible party is a grantor, owner, or trustor.

Most attorneys who are handling the estate or trust will obtain the EIN and take care of these matters.  However, I believe it is important to understand these points so that you and your etate attorney are on the same page.

While Texas has the best system for transferring your property through your estate planning, it is more than a document.  It is a process process with many moving parts to secure your legacy.

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To avoid such fights, conversations should be started early.  Either the older or the younger generation may initiate this talk, but the idea is to get an idea of who wants what.  To assist in this you should make an inventory of your possessions to discuss with your attorney.  Share the list with family members.

It is also a good idea to have your property appraised.  You can use the local appraisal district’s valuation for real estate, but understand it may not be accurate.  Personal property items, other than automobiles, may be difficult to assign values to, so seek help.  If there is a great disparity in value of items, then you might consider selling them.  Cash is always easier to divide among heirs.

You know your family better than anyone else.  If you know they do not see eye to eye, do not rely on them being able to work together to divide assets.  You will have to divide them or give your executor the ability to do so.  However, please make every effort not to burden your executor with refereeing family disputes.

You might consider including a list of personal property in your Will.  However, be aware your Will becomes a public record and the whole world will be able to see the list.  Talk to your attorney about alternatives to listing items in your Will.

The best way to avoid a fight or conflict is through careful planning, done way ahead of time.  Do not put off until tomorrow what needs to be done today.  Seek the guidance and advice of an attorney who handles estate planning.  There is a good chance he or she will have experience with “sticky” matters and how to best avoid them.

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Each state has its own laws regarding estate planning and real estate. Property laws can vary significantly, affecting everything from the way property titles are held to how estates are taxed and probated. Therefore, the first step in planning your estate is to understand the specific laws that apply in each state where you own property. This may require consultation with estate planning attorneys who are licensed in each respective state to ensure all local regulations are met.

One of the primary challenges of owning property in multiple states is the possibility of having to go through multiple probate processes upon death. Probate can be time-consuming and expensive, particularly if it needs to be conducted in several states. To circumvent this, many estate planners recommend placing the out-of-state property in an limited liability company or perhaps a revocable living trust.

While Texas does not have an estate tax, if you own property in multiple states, you might be subject to estate taxes in each of those states, depending on their laws. Some states have higher estate tax thresholds than others, and a few have no estate taxes at all. Planning strategies might include shifting your domicile to a state with more favorable tax laws or restructuring ownership of properties to minimize the tax burden.

It’s also important to consider the impact of capital gains taxes and how they interact with estate taxes. In some cases, keeping property in the family can lead to significant tax advantages over selling it before death. An estate planning attorney can provide guidance on how to best manage these tax implications.

Organize and maintain detailed records for each property, including deeds, mortgage documents, insurance policies, and a list of all maintenance activities. This documentation will be invaluable for the executor of your estate or the trustee managing the trust.

As laws change and your personal circumstances evolve, so too should your estate plan. Regular reviews and updates will help ensure that your estate plan continues to reflect your wishes and adapts to any new laws or changes in your asset portfolio.

If your estate plan is complex, consider holding a family meeting to discuss your plans and the responsibilities each family member may have. This can help prevent confusion and conflict after your passing, ensuring everyone understands your intentions and the legal landscape.

Owing property in multiple states adds a layer of complexity to estate planning, but with careful preparation and expert advice, you can ensure that your estate is handled smoothly. Limited liability companies, trusts, strategic tax planning, and regular updates are key components of an effective multi-state estate strategy. Consulting with professionals who understand the nuances of multi-state estate planning will provide peace of mind, knowing that your legacy is secure and your wishes will be honored.

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Gather Important Records:

           Death Certificate (can be provided to probate attorney after initial meeting)

           Social Security Card

           Driver’s License

           Marriage Certificate

           Birth Certificate

           Birth Certificates of Children

           Insurance Policies

           Business Documents and Agreements (consider if the business had a succession plan – this will be apart from the probate process)

           Auto Titles and Registration

           Deeds & Titles to other Property

           Bank Account Information

           Bank Safe Deposit Box Information (Who can access the box and where is the key?)

           Financial Account Information (stocks & bonds)

           Retirement Account Statements

           Tax Returns (last three years)

(Consider tax filing deadlines for the current year)

            Loan Documents & Debt Information

            VA Information (discharge papers & VA claim number)

            Digital Account Information (account information, passwords)

            Information regarding Intellectual Property Rights

            Social Media Account Information (access, information & legacy programs)

            Estate Planning Documents (powers of attorney end upon death)

It is important to consider if any of  the above Assets have Beneficiary Designations.

Locate the Will. There is no formal requirement to file a Will before death.  If you cannot locate the original Will, you should also check with the attorney who prepared the Will – sometimes Attorneys will maintain the original Will.  Other places to look for an original Will include the following: bank safe deposit boxes, safes, gun safes, safe rooms, fire proof boxes and the freezer.  A lot of estate planning & probate attorneys use blue ink to help us determine that the document is an original. Original documents also often have colored jackets.  You should also check with other advisors such as CPAs, tax preparers, financial advisors, and insurance agents.  As mentioned below, at times and in certain circumstances a copy of a Will may be admitted to probate. Consider that a few companies offer digital vaulting of important documents such as Wills.

Review the Will or Trust – read it.  In Texas, the Will needs to be signed by the testator and be witnessed by two individuals above the age of 14.  Don’t assume the Will is valid or invalid.  Don’t assume that because its old its invalid.  Don’t assume that because it was prepared by an online company that it’s valid.

Generally, the original Will is admitted to probate, meaning filed with the court and retained with the court file.  However, in certain circumstances, a copy of a Will can be probated. Note, Texas also recognizes the existence of a “Holographic Will” – this Will needs to be “entirely” in the handwriting of a testator and signed.  Just signing a typed document doesn’t count.  Once you locate the Will you should keep it safe because your probate attorney will need to review it at the initial meeting.  You will need a probate attorney.  You cannot represent yourself in a Texas probate.

Another tip is to keep beneficiaries informed. There is no formal requirement to make a Will public to the beneficiaries by “reading” a Will in Texas.  However, there is a requirement that the beneficiaries be furnished with a copy of the Will.  Your probate attorney will take care of that and other legal requirements.

As always, check with your attorney to decide which method of estate administration is right in your particular circumstance.  It could save you time and money.

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Filing out an out-of-hospital “Do Not Resuscitate” form for your loved one is part of bringing in hospice to provide  extra care.  When hospice comes in curative care stops and comfort care begins.  This is not an easy task to undertake for a loved one.

Many hold off signing an out of hospital do not resuscitate form because as someone goes down a path with no off-ramps, there could be times when resuscitation makes sense. Then there comes that day when you just need to accept those times are past; that if we have not reached the end, we can see it from here.

Advanced directives are designed to provide both guidance and comfort for those around someone who is nearing death, not to mention fulfilling the wishes of the one dying.  Without having real conversations about this issue, you might not have that comfort.  When you make a decision that basically accepts death as opposed to hope for life, it is hard, no matter how prepared for it you think you are.  You come to realize this in conversations with others, particularly where maybe not all family members are accepting of the finality.

Most of us have an extended family and most of them are not “on the ground” with us the last few months are days we live.  It is important that when the decision about the end of life is made, all of the close family is on board.  Some extended family may not be, but , it is none of their business. Respect and courtesy says you inform them, but when it comes down the decision time, it’s up to the person legally designated to make that decision. Talk to whomever you want, but in the end, it will be who you choose to share information that matters.  That is why it is important to really talk about the end of life when everyone is healthy and sound of mind. Such a conversation will provide a lasting memory and hopefully comfort.

I can not tell you how many unbilled hours this sweet lady spent with families, holding their hands and guiding them.  These memories came back to me reading her husband’s letter on this challenging time of life.

During these conversations you must be very clear with each other about what you want.  For instance, I have had many clients recount when a loved one had a feeding tube installed and that person had no hope of recovery. Often followed by the statement “if you stick one of those down my throat, I will come back and haunt you.”

When one is suffering from something like frontal temporal dementia, which can impact swallowing at some point, just remembering those conversations gives comfort as you are making that particular decision.

When you have these conversations, sitting at the kitchen table or on the patio, you are not thinking about the time you will have to make decisions about life or death. Most believe they will live long lives then fall over dead without a lot of complications.  However, life does not turn out that way.

This one hit close to home because my co-worker was such a sweet lady.  It reminded me of my father’s journey at the end.  Help your loved ones by communicating and making the decisions for them and then consult with an attorney to help you.  These documents are very important and you cannot afford to leave an I un-dotted or a T un-crossed.

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Another common thought is that I can just do this myself.  With the internet comes a vast amount of information and tools.  However, a person may not practice law in the State of Texas unless they are licensed by the State Bar of Texas per Section 81.102 of the Texas Government Code.  In fact, the unauthorized practice of law is prohibited by Section 81.106 of the Texas Government Code.  There will always be the shadetree “lawyer” who is going to do it himself or herself.  Most of these homegrown documents or instruments end up creating problems that cost more in the long run.

While the traditional tools work very well at accomplishing their designated tasks, you might be surprised to learn that they are not the only tools available for estate planning.  Depending on your particular assets and desires, then the use of a limited partnership, limited liability company, corporation may be right for the situation.

All of the business entities mentioned above are common when a business is owned by different individuals.  While the primary purpose for forming one of these business entities is for liability protection, they also provide for a means to manage the business and eventually shift ownership.

Limited partnerships have general and limited partners, the general partner(s) are responsible for management and decision making.  The limited partners are investors or owners with no management or decision making authority.

Limited liability companies and corporations have either membership holders or shareholders.  Typically the membership/shareholder(s) elect the officers who are responsible for management or decision making.  Thus, the membership/shareholder(s) with the greater number of membership interests or shares control.

The interests in all of these forms of business entities are something that can be transferred over time, therefore making a perfect vehicle for parents or grandparents to maintain control over assets owned by the business entity until they pass away or are ready to shift the majority of the ownership over to the next generation for control.  An additional benefit is that the family also has liability protection. So, using a family owned ranch/farm for example, if one family member is sued or found liable in some accident, then the assets of the other family members in ranching/farming business with them are not susceptible to being taken.  Another benefit is that incidents such as incapacity, death or divorce, can be addressed in the governing documents.  This means that should one of these events occur, there is a plan for how the property owned by the business entity is transferred.

If you are thinking of working on your estate plan, then perhaps one of these business entities is right for you.  Or maybe you are a candidate for a more traditional plan.  In either case, you should sit down with an attorney familiar with traditional plans and business entities to find out what estate plan is best for your needs.

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Planning for the future can be overwhelming, but creating a care plan is one place to start for a family dealing with a member who has a disability.  Your loved one might qualify for local or federal benefits and you might be able to save for their needs in a tax-advantaged ABLE account.  For long-term planning, you might want to consider a trust for an individual with special needs.  When you have a family member with special needs, you think about so many things all at once that future planning often gets shunted aside in favor of getting through today. But most of the challenges you face are not temporary. So when you are ready, you might consider thinking through the whole life cycle of help that is ahead of you.

A good test for when you need to do advanced financial planning for an individual with special needs is if you anticipate them needing assistance caring for themselves through adulthood.  When you determine the severity of the need, you can then figure out what level of local and federal benefits are involved.

Individuals lose eligibility to certain government benefits if they have more than $2,000 in countable resources ($3,000, if married), according to the Social Security Administration.  But by saving in an ABLE account, some families can help shield contributions from that countable-resources limit. What’s more, after-tax contributions to these accounts can grow tax-deferred, and if withdrawals are used for qualified disability expenses, which includes but is not limited to rent, food, transportation, education and employment training, health care, and personal support services, any earnings on such distributions will be federal income tax-free. These accounts don’t make sense for everyone, so consult with a financial advisor to see if it is a good strategy for you.

It’s important to know that ABLE accounts do have an annual contribution limit.  In 2025, the limit is $19,000 from all contributors in aggregate.  However, the ABLE to Work provision of the Tax Cuts and Jobs Act of 2017 allows ABLE account owners who can work to save an additional amount equal to the lesser of their compensation for the taxable year, or an amount equal to the federal poverty level, which is $15,650 per single-person household in 2025.  Additionally, if the total assets in the ABLE account exceed $100,000, Social Security for the person with disabilities may be suspended.

It can be hard for families to look far down the road and think about what happens when primary caregivers are no longer able to care for their loved one, but setting up for the future can prevent mistakes later on that could negatively impact benefits and cause conflict.

For instance, it may not be a good idea to list a person with special needs as the beneficiary on a parent’s financial and retirement accounts. If the assets go to the child, that could interfere with their ability to receive Social Security income for disability benefits.

There are several types of trusts that many families establish for the benefit of individuals with special needs. One of the most common is a third-party special needs trust, which is created by someone who wants to leave money for a dependent with special needs but doesn’t want that person to lose out on government benefits. The trust can be established by a Will or created during the benefactor’s lifetime. The creators of the trust appoint a trustee who has discretion over when and how funds are distributed. The trustee cannot distribute money directly to the dependent, but they can pay for certain items and services not covered by the dependent’s monthly Supplemental Security Income (SSI) for disability. Upon the death of the dependent, whatever assets are left in the trust can be distributed according to the creator’s wishes as specified in the terms of the trust.  A third-party special needs trust can be used in conjunction with an ABLE account, so families needn’t choose one or the other.

All estate plans need to evolve over time to keep pace with changes in people’s lives and financial situations. When your family is dealing with an individual who has special needs or disabilities, it is even more important to include them in your plans.  To make sure your plan stays current, review it every 3 to 5 years, or whenever your life or your family changes in a major way. That way you can be confident that your loved ones will be cared for when you’re no longer here to look after them financially.

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