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Understanding Special Needs Trust

Special Needs Trusts are essential in estate planning for individuals with disabilities. They are designed to improve the quality of life of individuals with special needs. These trusts can be established through courts, certain close family members or the individuals themselves. Establishing a Special Needs Trust requires considering various legal and financial factors in Texas. To establish a Special Needs Trust, we must first understand what it is and how it works.

A Special Needs Trust is defined as a legal arrangement in which a person with disabilities receives financial support without jeopardizing the potential of receiving government benefits through public assistance programs. These essential government programs include Medicaid and Supplemental Security Income (SSI). These trusts are crucial for providing a way for trustees to manage and distribute funds to beneficiaries without sacrificing their eligibility in these programs. There is much to learn about this type of trust.

Establishing a special needs trust in Texas involves navigating specific legal requirements. People who want to do so should seek the help of an estate planning attorney with experience in Special Needs Planning. Rainey & Rainey, Attorneys at Law, has experienced estate planning attorneys, and we are dedicated to ensuring your estate plan is one you are satisfied with. We have helped many families with their special needs planning and estate planning needs and would happily help you with yours. Call Rainey & Rainey, Attorneys at Law, today at (254)-752-8644 to schedule a consultation.

Types of Special Needs Trusts

There are several types of Special Needs Trusts, each having their specific use. Here are some commonly used types of Special Needs Trusts:

• Pooled Trusts: These are managed by nonprofit organizations, and funds are obtained by pooling investments from multiple beneficiaries. Each beneficiary has an individual account, although the account is managed as a whole. These types of trusts may be used when no individual trustee is available or an individual trust is not financially feasible.
• First-Party Trusts: These trusts contain assets that belonged to the person with the disability. They are often used when the individual receives a settlement from a personal injury lawsuit or inherits the money. A key feature of first-party Special Needs Trusts is that they must include a provision requiring the trust to reimburse Medicaid for benefits received upon the beneficiary’s death.
• Third-Party Trusts: These are created and funded by someone other than the individual with disabilities. The person who makes this fund is usually a close relative to the individual with disabilities, such as a parent, grandparent, or child of the individual. These trusts are typically used for estate planning purposes and do not require repayment to Medicaid upon the beneficiary’s death. They offer flexibility in how funds are used to benefit the individual with special needs.

Besides choosing the type of trust that works best for your situation, you should also remember that any kind of Special Needs Trust will require you to follow Medicaid’s and SSI’s regulations to ensure the individual with disabilities does not lose their government benefits. It is recommended to consult an attorney who is knowledgable in establishing trusts about this. 

Benefits of Special Needs Trusts

Special Needs Trusts provide many benefits to you and your loved ones. Besides the aforementioned benefits of enhanced quality of life and retaining the ability to qualify for public assistance programs, establishing a Special Needs Trust for a loved one with disabilities gives you peace of mind about their financial security. It prepares you for the unexpected and provides structure in the case of an unpredictable emergency or event. Establishing this fund will also prevent others from misusing the funds dedicated to an individual and ensure the beneficiary’s best interest.

Anyone seeking to establish a Special Needs Trust should also know its legal requirements. This includes choosing the correct type of trust that fits your financial situation the best, consulting with professionals, drafting the trust document, funding the trust, appointing a trustee, and many other tasks that can be overwhelming. Keeping track of all these tasks and information while ensuring you meet compliance with the SSI and Medicaid rules so as not to lose benefits is a daunting task. This is why many choose to hire an estate planning attorney to stay informed throughout the process.

What To Do Next

Estate planning, in general, can already be a complicated and sensitive process, but a Special Needs Trust requires additional attention due to its many intricacies. Thankfully, the knowledgeable and experienced estate planning lawyers at Rainey & Rainey are equipped to navigate you through difficult decisions and give you the legal assistance you and your family deserve. 

Ensuring your estate plan is updated in case of an unexpected event will give you and your family security. If you still need to figure out how to establish a Special Needs Trust, don’t wait. At Rainey & Rainey, Attorneys at Law, we want to hear your case and determine your best course of action. We have seasoned attorneys who can provide compassionate advice on many legal matters. Call us today at (254)-752-8644 or visit our website to schedule a consultation.

Planning for Your Tomorrow, Today

Estate planning is a legal term used to describe the necessity of preparing for the eventualities of growing older, such as death, chronic illness, or incapacitation. Estate planning has many aspects that involve wills, living wills, trusts, and sometimes power of attorney. There are multiple benefits to estate planning, even for those who don’t have many tangible possessions or who may be young. A well-thought-out estate plan is a loving gift to your family members during the difficult period after your passing or your illness.

As an entrepreneur, estate planning becomes even more critical. Only through careful planning can your business and all your assets remain protected for your loved ones after your passing. Our experienced estate planning attorneys are available to answer any questions. Your future is our business at Rainey & Rainey Attorneys at Law, LP—call (254) 457-5083 for a detailed consultation today.

What is Probate?

Probate is the the legal process an estate must undergo after a person dies. For the probate process to begin, someone must come forward to start it. This obligation usually falls to the executor chosen by the deceased person to oversee their estate affairs once they pass away.

If there is a will, the executor must file it with the probate court. Other forms may be filed, and fees must be paid. If there is one, the will will need to be authenticated, which should be shown as the last word and testament of the deceased. The estate executor can expect their role to last anywhere from six months to one year.

Some types of property are passed automatically under the law, while some are required to go through probate. Texas’s probate process is more time-consuming than most people realize. Effective estate planning can help mitigate some of these headaches.

What is a Succession Plan?

As a business owner, estate planning becomes more complex. Drafting a coherent and precise plan is vital so your heirs and business partners (if applicable) know precisely what you wish for the business.  A succession plan is a document that outlines who you want to take over in the event of your absence. For entrepreneurs, one of the most essential aspects of estate planning is creating a succession plan.  A strong plan has three parts: 

• The first thing to consider is who you would like to take charge if you were to become incapacitated in some way (such as in the event of an accident, coma, or prolonged illness) 
• Secondly, think about what you would like to have happen when you retire. Who will take over the day-to-day functions of your business to keep it operational? 
• Finally, consider who will assume control at the time of your passing. Our estate planning lawyers are available to help you draft a succession plan that is best suited to the needs of your business and family  

Can a Trust Help Protect My Business?

Many types of trusts can be set up to help protect your assets. For entrepreneurs, a grantor-retained annuity trust (GRAT) is an excellent option to consider. A GRAT can be established during your lifetime. A GRAT allows you to maintain an income source while protecting your assets outside your taxable estate. Another thing to consider when setting up trusts for your business is whether they are revocable or irrevocable. Revocable trusts can be changed or terminated during your lifetime, while an irrevocable trust is set once established. Ask our experienced estate planning lawyers can answer any questions you have about GRATs or other available trusts.

Does an Estate Planning Attorney Help with Estate Administration?

Few things in life are more devastating than the loss of a loved one. Creating an inventory of the estate and allocating the estate’s assets to beneficiaries and creditors is known as administering the estate. This can be an emotional and complex process during a challenging period for a family. Our compassionate and understanding estate planning attorneys can guide you through it. We will do everything possible to help make this difficult transition more manageable for your family.

When Should I Call an Estate Planning Attorney

There are few gifts we leave our loved ones that give them true peace of mind after we are gone. No one can ever truly prepare for such an event; it is difficult to think about. The most loving thing we can do is discuss these matters beforehand.

As a business owner, you want to know that your business will be in good hands if you can no longer run it. Strategic planning can mitigate much of the stress for your survivors. Rainey & Rainey Attorneys at Law, LP, has a friendly and knowledgeable legal team available—call 254-457-5083 to schedule your detailed consultation.

Why is Thoughtful Estate Planning Vital for Blended Families?

Estate planning for blended families in Texas requires careful consideration and a tailored strategy to ensure that the needs and wishes of all family members are addressed. With the increasing prevalence of blended families, it’s crucial to understand the unique challenges of creating a comprehensive estate plan that safeguards the interests of everyone involved. A helpful elder law attorney can provide useful tips for approaching the estate planning process so you can ensure your assets and loved ones are protected.

What Issues Should Individuals With a Blended Family Explore as Part of the Estate Planning Process?

Blended families can face unique estate planning considerations that require special attention. Balancing the needs of the current spouse with those of children from previous relationships is a topic many blended families must address. While discussing the passing of yourself or your spouse can be uncomfortable, failing to prepare for these events can cause unnecessary hardships for those you love. In Texas, if a person dies without a will, the state’s intestate succession laws dictate how assets are distributed. Unfortunately, the outcome of this process may not align with the decedent’s intentions for their estate. Members of the decedent’s blended family could be left with a smaller inheritance or passed over entirely, potentially causing financial difficulties and rifts in familial relationships.

Building a robust estate plan with the assistance of a skilled legal advisor can help prevent these problems. By engaging in proactive planning, members of a blended family can be confident their hard-earned assets will be passed to their loved ones in accordance with their wishes. While a will is a critical part of almost all estate plans, further planning strategies may be used to maximize the value of your estate for your family and ensure a smooth transition of assets.

Couples may consider creating separate trusts or utilizing specific estate planning tools designed for blended families. For instance, some trusts can provide income for the surviving spouse while ensuring that the principal is preserved for children from a previous marriage. Additionally, couples may want to discuss creating prenuptial or postnuptial agreements to clarify financial responsibilities and asset distribution in the event of death or divorce.

How Can Estate Planning Protect You and Your Family During Your Lifetime?

While many people think about estate planning as a way to guide events that will happen after their passing, it can also play a vital role during their lives. Advance healthcare directives and powers of attorney are critical components of estate planning for blended families in Texas. These documents help ensure that all essential healthcare and financial decisions align with the individual’s beliefs and wishes if they become incapacitated. Healthcare directives allow individuals to express their preferences regarding medical treatment and designate trusted persons to make healthcare decisions on their behalf. Financial powers of attorney can grant another person the ability to handle the individual’s economic affairs when specified terms are met.

For blended families, these legal instruments take on added importance due to the complex family dynamics and potential for conflicts between stepfamilies. Carefully selecting and documenting who has the authority to make critical choices can help prevent disputes and ensure the individual’s desires are respected. Additionally, having detailed instructions in place can alleviate the burden on family members during already stressful times. When properly drafted, these planning documents can provide peace of mind to you and your family in the event you can no longer make or communicate your own choices.

Why is it Necessary to Carefully Construct Your Estate Plan?

Sadly, blended families may sometimes see conflicts arise after the passing of a family member, particularly a parent or stepparent. There may be disappointment over inheritances or confusion over who owns treasured family items. Clear, detailed estate planning documents that leave no room for interpretation may help mitigate these risks. To create an unambiguous plan that covers all eventualities, you may wish to specify guardianship arrangements for minor children, outline how family heirlooms or sentimental items should be distributed, and address potential scenarios such as remarriage of the surviving spouse. Some families may also benefit from appointing an independent fiduciary or trustee to manage and distribute assets, reducing the likelihood of disputes.

Why Should You Revisit Your Estate Plan Often?

As the dynamics of your blended family change and relationships evolve, it’s essential to regularly review and revise estate planning documents to reflect current circumstances. Updating wills, trusts, beneficiary designations, and other legal instruments is key to ensuring they accurately represent the wishes and needs of the individuals involved. Failing to update these documents can lead to unintended consequences, such as inadvertently disinheriting certain family members or creating conflicts between surviving spouses and children from previous relationships.

What Impact Can Texas’ Laws Have on Your Estate Plan?

When approaching estate planning in Texas, it’s crucial to thoroughly consider the state’s laws and regulations. Texas is a community property state. Therefore, property acquired during the marriage is generally considered to be owned equally by both spouses. This rule can have significant implications for asset distribution in blended families, particularly when one spouse brings substantial separate property into the marriage. A skilled estate planning lawyer can help you understand relevant state laws and how they may apply to your specific situation so you can create an effective estate plan.

How Can Our Law Firm Assist You?

Given the complexities of estate planning for blended families, seeking knowledgeable legal counsel can be invaluable. An experienced attorney from Rainey & Rainey, Attorneys at Law, LP can help you navigate the intricacies of Texas law, identify potential pitfalls, and develop customized solutions that address your family’s unique needs. Contact our law office today at 254-457-5083 to request a consultation and learn how we can serve you.

Should You Establish a Trust?

In the State of Texas, if you choose to set up a trust, you will need the advice and assistance that a Waco trust attorney will provide.

If you own a home or a business in Texas, if you have any specific or special needs in your family, or if you own significant assets and properties, creating a trust may be the best tool to protect your assets and properties throughout your lifetime and preserve those assets and properties for your beneficiaries after you pass away.

Trusts – both irrevocable and revocable trusts – are popular estate planning tools. When you set up a trust, a Waco estate planning lawyer can help you consider your options and advise you regarding the best estate planning choices for you and your loved ones.

Why Establish a Trust?

Your trust is a legal and financial document that requires you to designate a trustee who will manage your assets and properties for your beneficiaries after your death. Your trust may specify precisely when and how your properties and assets are to be distributed to your beneficiaries.

The conditions and terms of your trust should be set forth carefully in the trust document, and that document should clearly indicate who will receive your assets and properties (and when). You may prepare a trust that is “revocable” or “irrevocable.”

What Action Can You Take to Avoid Probate?

With a properly created, and correctly maintained trust, your estate and your beneficiaries will avoid the probate process, and your assets and properties will be transferred sooner than they would if you had established only a will. Moreover, your beneficiaries will not have to deal with a probate court’s interference.

If you prepare only a will, in order for your assets to transfer after you pass away, your loved ones will need to begin some sort of probate process. This probate process may involve a probate court and long time delays.
For many, it is important to avoid probate. It can be lengthy and expensive, and in many cases. Probate proceedings go on the public record, so if privacy is a high priority for you, you may consider a trust and avoid the probate process.

Is a Revocable Trust Right for You?

If you prepare and properly use a revocable trust, your estate and your beneficiaries will avoid probate. You will stay in charge of the properties and assets in the trust for your lifetime, unless you become unable to manage the trust or choose to step aside so that the successor trustee of your choice can step to serve. A revocable trust may be amended, revised, or dissolved if your situation changes or if your wishes change.

You may designate yourself as the trustee of your revocable trust, but you also must designate a successor trustee to oversee your trust after your death or if you become incapacitated. Upon your death, your revocable trust immediately becomes an irrevocable trust.

If you have a revocable trust that has not been updated, or if your trust was prepared in another state, have a Waco estate planning lawyer review the trust to make sure that it is up-to-date, that it still meets your needs, and that it is compliant with this state’s financial requirements.

Is an Irrevocable Trust Right for You?

An irrevocable trust protects your properties and assets from estate taxes and the probate court, but an irrevocable trust cannot be dissolved or revised after it is established. When you move properties or assets into an irrevocable trust, you no longer own or control those properties and assets.

In some cases, however, setting up an irrevocable trust reduces the assets that are subject to estate taxes. There are no taxes on the income produced by an irrevocable trust’s assets, so long as that income is distributed in that year to the trust beneficiaries (although the distributions of such income may have tax consequences for the beneficiaries).

If the trust is properly created and administered, assets in your irrevocable trust are protected from legal judgments against you. Additionally, an irrevocable trust may instruct your trustee to halt temporarily or, in some cases, terminate distributions to a beneficiary who is named as a defendant in a lawsuit or files for bankruptcy.

Which Type of Trust Provides the Advantages You Need?

The flexibility of a revocable trust makes it a popular estate planning tool because a revocable trust lets you stay in charge of the assets you transfer into the trust. However, depending on your situation and your needs, the better option may be establishing an irrevocable trust.

A “specialty” trust is a revocable or irrevocable trust prepared for specific situations and needs. A Waco trust attorney can discuss specialty trusts with you and may advise you to prepare one of these:

1. an asset protection trust
2. a testamentary trust
3. a special needs trust
4. a marital trust
5. a life insurance trust
6. a charitable trust

What’s the Best Way to Protect Your Estate and Your Loved Ones?

If you’ve worked hard and saved, you should prepare a comprehensive estate plan that can protect your properties and assets, reduce your taxes, accomplish your wishes, and provide for your family after you’ve passed away.

Now is the time to schedule a meeting with an estate planning lawyer who can offer practical advice and help you start the estate planning process. And if you have an estate plan in place, it may be time to have that plan updated.

Why Should You Choose Rainey & Rainey?

You can learn more about trusts and estate planning by scheduling a consultation with Rainey & Rainey. We offer advice and insights based on our experience – more than two decades – helping clients prepare trusts and plan their estates.

After we discuss your finances, circumstances, and goals, Rainey & Rainey will recommend a comprehensive estate plan that protects your estate and offers security to your loved ones for years to come.

To find out more or to schedule your first consultation, call the offices of Rainey & Rainey at 254-457-508 (in or near Waco) or 512-357-7169 (in the Georgetown area). Across the State of Texas, we help clients and their families prepare for the future. Learn more, and call us today.

How Should Your Estate Be Administered?

Probate law in the State of Texas offers two ways to settle an estate: independent administration and dependent administration. To ensure that your own estate in Texas is settled properly after your death, you’ll need the advice and legal help that a Waco probate attorney provides.

What is probate? After a person’s death, probate is the legal process that inventories and evaluates the assets and properties in the decedent’s estate, pays the estate’s taxes and debts, and then distributes what remains of the estate according to the instructions in the decedent’s will.

The way your estate in Texas will be probated depends on your circumstances. Determining which administration method is best for your estate will hinge on several factors, including the complexity and size of the estate.

How Does Independent Estate Administration Work?

With independent administration, an estate’s executor is authorized to make decisions about the estate and is not required to consult a judge while settling the estate. Independent administration must be specified by the decedent’s will, or all of the decedent’s beneficiaries must agree to it.

Because the probate court does not interfere with the executor’s duties, independent administration of an estate is usually faster and easier than dependent administration. An estate’s executor, for example, may sell off properties and settle claims without obtaining court approval.

In the State of Texas, an estate’s executor has considerable legal responsibilities. If you are named as the executor of an estate that will be administered independently, when that time comes, you should be advised by a Waco probate lawyer who will ensure that you understand what the law requires and help you avoid costly mistakes.

How Does Dependent Estate Administration Work?

An estate with dependent administration is supervised by a Texas probate court. The executor of an estate with dependent administration must have the probate court’s approval in order to settle claims, sell off properties and distribute the estate.

If someone dies without a will in Texas, state law provides that the estate will be dependently
administered unless all of the decedent’s legal beneficiaries agree to the independent administration of the estate.
Because dependent administration involves the approval of the probate court, it takes substantially more time than independent administration, and there is more work for the executor of the estate.

Does Dependent Administration Offer Any Advantages?

However, dependent administration does offer some practical advantages to executors and beneficiaries. If an estate is in debt, for instance, dependent administration helps to ensure that the estate’s creditors will receive payment.

Dependent administration of an estate requires an executor’s actions to be approved by the probate court, so if the executor’s actions are challenged, dependent administration gives an executor additional legal protection that independent administration does not provide.

Also with dependent administration, the requirements for documentation and the heightened scrutiny help to protect an estate from disputes and unsubstantiated claims. However, getting a probate court’s approval for every transaction may be quite challenging and time-consuming.

Because there’s so much more work for the executors of estates with dependent administration, the executors of those estates should also have the legal services and advice that a Texas probate attorney can provide.

Have You Prepared a Will?

If you’re an adult in Texas, and if you haven’t prepared a last will and testament, the time to do so is now. Have a Waco probate lawyer help you prepare your last will and testament, and discuss with your lawyer if your estate should be administered dependently or independently.

If you already have a valid last will and testament in place, you may need to revise that document to address the administration of your estate. A probate lawyer in Waco can advise you regarding dependent vs. independent administration and help you make the necessary revisions.

A probate attorney can also help you protect your assets from the probate process. One option is establishing a revocable living trust. Assets that are legally owned by your living trust are transferred directly to your beneficiaries without probate court interference. Your attorney can prepare a revocable living trust and explain your other options for avoiding the probate process.

What Else Should Executors and Beneficiaries Know?

When an estate is large and complicated, or if there’s a dispute among the beneficiaries, probate courts in Texas have the power to impose dependent administration on an estate even if independent administration has been specified in the will and agreed upon by the beneficiaries.

Whether you are the executor of an estate with independent administration or with dependent administration, you may find that your duties and responsibilities can be overwhelming. Do not wait to obtain the legal advice you need from a Waco probate attorney.

Should You Have a Comprehensive Estate Plan?

A revocable living trust or a last will and testament is only one element of a comprehensive estate plan that can protect your properties and assets and provide financial security to your loved ones for years to come.

No one can predict tomorrow, but you can be prepared for whatever tomorrow may bring. Every estate plan is unique, but your own comprehensive estate plan should include a will and/or a trust, a durable power of attorney for financial matters, and a power of attorney for healthcare.

If you have a family, own a business, or have any significant properties and/or assets, you need to begin planning your estate now. The right Texas estate planning attorney can help you begin the process and provide you with the key insights and advice you may need.

Rainey & Rainey – Helping Texans Prepare for the Future

For over fifteen years, the award-winning legal team at Rainey & Rainey has been proud to serve families throughout Central Texas with reliable probate and estate planning advice and services.

An attorney with Rainey & Rainey can also discuss guardianships, living wills, and long-term healthcare planning. We will answer your planning questions, address your concerns, and prepare the legal documents that you need to protect yourself, your estate, and the people you love.

To learn more, to begin the estate planning process, or to obtain the probate, estate administration, or estate planning help and advice you need right now, contact the offices of Rainey & Rainey in Waco at 254-752-8644 or in Georgetown at 512-598-9005.