Blogs from July, 2020

A number of our clients have a trust as the main document in their estate plan. Some of them created a trust before ever talking with Crain & Wooley and were not educated on how a properly crafted trust works. For example, some people never put anything in their trust (attorneys call that funding the trust). One reason people say they didn’t fund their trust is that they didn’t know they should. Another common reason people say they didn’t put anything in their trust is they were afraid it would negatively impact their taxes.

It is extremely important that you make sure your assets are part of your trust. If your trust does not hold any assets, your trust is not doing anything! Only assets held in the trust are subject to the provisions of your trust. You must place assets in your trust. Your attorney should help you to understand how your trust works and explain to you how your trust will affect your taxes once the trust holds your assets.

For those concerned that you would lose your homestead exemption (or 65 and older exemption, or other tax exemptions) if you put your house in a trust – you don’t have to worry! If your Trust and accompanying legal documents are drafted properly, you do not lose your tax exemptions on your house if your house is in your trust.

If you are the owner of the house and you create a trust that you stay in charge of as trustee, the law is on your side. Some clients have come to me thinking that they can’t put their house in their trust until they pay the mortgage loan off. The good news for that situation is that you can put your house in your trust even if it is currently subject to a mortgage, without triggering any due on sale clauses. You should not wait to put assets in your trust because you might wait until it is too late.

For those concerned that a trust may cause your tax rate to be much higher due to trust tax rates – you don’t have to be concerned either! If drafted properly, your trust can be considered a pass-through entity and your tax rates will be the same both before and after your trust is in place.

Don’t let tax concerns or lack of knowledge prevent you from enjoying the benefits of a properly drafted and executed trust. Whether it is your first trust or you are updating an existing trust – you should work with a legal professional who can help to educate and guide you through the proper creation and effective use of this important legal tool.

Have questions? Contact us today!

There is a lot of confusion surrounding two frequently used yet greatly misunderstood terms: Do Not Resuscitate Order (DNR) and Directive to Physicians (Living Will). Unfortunately, many of us use these terms interchangeably.

However, they are NOT the same “thing”. These documents may seem similar in nature, but their efficacy is vastly different. Understanding the difference and taking appropriate action is very important.

DIRECTIVE TO PHYSICIANS (AKA LIVING WILL)

A Directive to Physicians allows a person to indicate their future wishes should they be in a terminal condition and unable to communicate regarding further treatment. This document is sometimes called a Living Will but should not be confused with a Last Will and Testament.

This important document allows a person to state their desire, in advance, that their life not be prolonged with the use of artificial, life-sustaining procedures when their death is inevitable (i.e., no chance of recovery) and in the situation where the person is unable to communicate.

This document does not state that you do not want life-saving procedures when there is a chance that you will recover. This document prevents the type of situation that makes the news every few years where someone is declared brain-dead and/or having zero chance of recovery, but family and friends fight over whether or not to keep the person on life-sustaining machines. 

DO NOT RESUSCITATE (DNR) ORDER

Medical professionals will administer life-sustaining treatment when possible as their standard procedure. Some people may not want cardiopulmonary resuscitation (CPR) or other resuscitation procedures to be administered. If a person does not want those procedures performed, a Do Not Resuscitate (DNR) Order is required to direct medical professionals not to perform resuscitation procedures. 

The standard, in-hospital DNR is an order that instructs health care professionals not to attempt cardiopulmonary resuscitation on a patient whose circulatory or respiratory function ceases. (Health and Safety Code 166.201). This type of order is only valid if the patient’s attending physician issues the order, the order is dated, and the order complies with the requirements outlined in section 166.203 of the Health and Safety Code. 

However, not everyone is in a hospital when they decide they do not want resuscitation procedures to be administered. For example, a person may be in a long-term care facility and decide they do not want additional resuscitation procedures to be administered should their circulatory or respiratory function cease. In these instances, an Out-of-Hospital Do-Not-Resuscitate Order (OOH-DNR) is the appropriate document to indicate that a person wants to provide for the natural process of dying by preventing the use of artificial, life-sustaining measures. Procedures that can be prevented with an OOH-DNR include CPR, advanced airway management, artificial ventilation, defibrillation, transcutaneous cardiac pacing and other life-sustaining treatment specified by the Texas Board of Health.

Keep in mind that emergency medical professionals are trained to immediately perform all life-saving procedures. If they do not immediately know that a person has an OOH-DNR, they will still perform life-saving procedures and will not be held liable for acting if they have no knowledge of an OOH-DNR. As a result, the most effective way to give notice to emergency medical professionals is to wear an OOH-DNR identification device, as approved by the Texas Board of Health. A legally recognized bracelet indicating a person’s OOH-DNR immediately and conclusively informs medical personnel that a valid OOH-DNR has been executed. As an example, you can purchase a Texas approved medical device from American Medical Identifications, Inc. (https://www.americanmedical-id.com/).

As you can see, there is a significant difference between a Directive to Physicians and Do Not Resuscitate Order.  If you have any questions, contact us today!