The Planner - April 2012

The wildflowers are blooming profusely as we enjoy a beautiful Texas Spring! I hope you can take some time to enjoy our local beauty before the heat begins.

I just returned from a trip to China, where I was able to tour Beijing, Shanghai, and Hangzhou. It's striking to see first-hand how populated the country is and the tight control the government has over them.

In this issue of The Planner, we will provide an introduction to asset protection planning: what it is, types of risk, when to plan, what to expect in the planning process, and levels of planning. We also discuss some common misconceptions about advance health care directives.

April is also National Child Abuse Prevention Month. Locally, Court Appointed Special Advocates (CASA) provides volunteers to help guide youth through the child welfare system. CASA hosts health fairs and workshops in our area. In February, I attended their annual CASAblanca Gala, where they raised a record-breaking $350,000. On May 6th and 7th, CASA is hosting joint fundraisers. Friday night at UT Alumni Center there is a free event including music, food, and silent and live auctions. Then on Saturday, there is golf tournament featuring food, drinks, and many prizes. Please consider attending these great events or giving to CASA of Travis County to help end the cycle of abuse and allow our youth to have happy and safe childhood.

Cheers,

Ronald G. Greening

The Greening Law Firm, P.C.

Do You Really Need Advance Directives for Health Care?

Many people are confused by advance directives. They are unsure what type of directives are options, and whether they even need directives at all, especially if they are young. There are several types of advance directives. One is a living will, which communicates what type of life support and medical treatments, such as ventilators or a feeding tube, you wish to receive. Another type is called a health care power of attorney. In a health care power of attorney, you give someone the power to make health care decisions for you in the event are unable to do so for yourself. A third type of advance directive for health care is a do not resuscitate (DNR) order. A DNR order is a request that you not receive CPR if your heart stops beating or you stop breathing. These need to be handled in individual documents.

If you are 18 or over, it's time to establish your health care directives. Although no one thinks they will be in a medical situation requiring a directive at such a young age, it happens every day. People of all ages are involved in tragic accidents that were not foreseen and could result in life support being used. If you plan in advance, you can make sure you receive the type of medical care you wish and avoid a lot of stress to your family, who may be forced to guess your wishes and have a court involved in choosing who will make those decisions for you.

Many people do not want to prepare health care directives because of common misconceptions. People are often frightened to name someone to make health care decisions for them, because they fear they will give up the right to make decisions for themselves. However, an individual always has the right, if he or she is competent, to revoke the directive or make his or her own decisions. Some individuals also fear they will not be treated if they have a health care directive. This is also a common myth - the directive simply informs caregivers of the person you designate to make health care decisions and the type of treatment you'd like to receive in various situations. Planning ahead can ensure that your treatment preferences are carried out while providing some peace of mind to your loved ones who are in a position to direct them. Parents can execute these documents on behalf of their children.

Trash Pick-Up for Elderly and Disabled Residents of Austin and Georgetown

You may not know that the City of Austin will pick up trash cans, yard trimmings, and recycling from beside the house for elderly and disabled residents. Instead of taking them down the driveway, residents can leave the receptacles next to the garage door. Interested individuals can call 311 to request a Special Services Application. To qualify, applicants must have a health care professional sign the application confirming the need of special services.

The City of Georgetown provides a similar service through its terrific contractor, Texas Disposal Systems. Individuals with special needs who would benefit from having their refuse picked up from just outside their garage may call to explain their situation: (512) 930-1715. There is no application to complete or extra charge for this service.

Please share this information with individuals you think may benefit from extra assistance.

An Introduction to Asset Protection Planning

Almost everyone knows someone who had a financial problem and lost everything. Claims can, for example, allege professional liability, responsibility for a car accident, or unpaid creditors. Whether meritorious or not, defense can be enormously costly. With our litigious society and with limited risk for those making liability claims, asset protection planning has become required for many and highly desirable for many more.

What is Asset Protection Planning?
Asset protection planning is not about hiding or concealing assets. It is about using the existing laws appropriately to obtain the best possible level of protection for your assets.

When to Plan
The best time to plan is before a claim arises. There are different rules that apply for known claimants and unknown future claimants. But even with an existing claim, and sometimes even after a judgment has been entered, some options may still be available. It is, however, vital to avoid making a "fraudulent" transfer; i.e., a transfer of assets with intent to defraud or hinder creditors that is made without full and adequate consideration.

The Planning Process and What to Expect
Because asset protection planning can include a variety of strategies, it is usually best accomplished by a team of advisors, which may include a CPA, estate planning attorney, financial advisor, insurance advisor and possibly retirement plan administrator. Any member of this advisor team may recognize that you need asset protection planning and recommend an evaluation, or you may have some concerns that you would like to address. Generally, the process takes at least three meetings to plan and implement. They are:

1. An Initial Meeting: During the first meeting, the advisors will gather basic financial information, determine your objectives and begin to establish a relationship with you. They will also set some reasonable expectations for how asset protection planning works, including how the laws work and what you can expect.

It is important that you are honest and forthright in providing the information requested. At the same time, because the very nature of asset protection planning can involve current worry about potential risk and/or litigation, it is important to determine early how much information you are willing to share and should share with various members of your advisory team. For example, it may be vital to preserve attorney/client privilege and not share litigious information with non-attorney advisors who could be subpoenaed later to disclose what you discussed with them.

2. An Advisors Meeting: After the initial meeting, the advisor team will usually meet without you to review your objectives, discuss various legal and financial solutions and determine a consensus solution.

3. A Solution Meeting: Here the advisor team will present a unified solution plan, including all legal and financial components, to you. Because many of us are living into our 90s, your plan should be flexible enough to accommodate changes over 20 or more years.

Have Reasonable Expectations
* Many people would like to have a high degree of certainty of the outcome of asset protection planning, but there may be circumstances that neither your advisors nor you can effectively control. Even so, the end result should be considerably better than if you had not planned at all.
* Many people want to maintain control rather than shift assets to some unknown third party. The preferred approach is to maintain control or at least oversight of your assets.
* You want to have a plan that will discourage lawsuits from the outset. Your advisors cannot make your assets appear not to exist, but they can create a structure that will make it much less attractive for a potential plaintiff to go after you than after someone who has done no planning.
* You want to avoid liability traps of owning assets or conducting other business in general partnerships or in joint ownership where the assets are at risk to problems another owner may have.

Funding the Plan
Once the plan has been approved, your advisors will make a list of the assets and determine where they need to go. It can easily take six months to a year to fully fund the plan, and it's usually done in steps and pieces. During this time, it's important that everyone stays informed about the process.

Levels of Asset Protection Strategies
There are numerous asset protection strategies you can employ, from very basic to advanced, depending upon the particular risks you face, your current situation, and the extent to which you are willing and able to go to protect your assets. Briefly, asset protection begins with utilizing state and federal law exemptions for things like homestead, life insurance, retirement plans, and limited types of jointly owned property. These exemptions have limited effectiveness, however, because they only protect these specific types of assets. For those who need broader protections, more advanced strategies like business entities and even trusts specifically designed to protect you against future creditors may be in order.

Conclusion
If you are concerned about protecting your assets, talk to our attorneys. We can help you evaluate your situation, put together a team of advisors and start putting a plan into place. Most asset protection plans will build right on top of your existing estate planning.

Remember, the best time to plan is before a claim arises.

Practice Limited to Estate Planning, Estate Administration, Probate, and Elder Law

506 West 15th Street, Austin, Texas 78701, 512.476.0888

1601 Williams Drive Georgetown, Texas 78628, 512.931.0888

www.GreeningLawFirm.com

The Greening Law Firm, P.C. blog