Estate Planning Questions
Yes. Having a valid Will in place at the time of your death can help make the administration and distribution of your estate easier for those who are left behind. Even if you have a living trust, you should still have a Will to cover assets outside of the trust.
A Will is a document which controls the ownership of your property upon your death. In Texas, there are two basic types of Wills -- (i) the attested or formal Will, which is in writing and is witnessed by two or more witnesses, and is the most effective and (ii) the holographic Will, which is wholly in the testator’s handwriting and signed by the testator.
If you die intestate or without a Will, your state's laws of descent and distribution will determine who automatically receives your property. These laws vary from state to state, and may not distribute the property the way you would choose to.
A Will becomes effective at the time of your death and specifies how your property is to be disposed of. A Will must be acknowledged as valid through a court procedure known as probate. A living trust also specifies how your property is to be disposed of at your death, but since it exists before your death, its validity does not need to be acknowledged by a probate proceeding. It is this quality – the avoidance of probate -- that has brought the living trust most of its recent popularity.
Maybe. A living trust can be used as an alternative to a Will. Determining if a living trust is the best solution for you depends on your circumstances. We can help you make that determination.
A trust is a legal device used for the management of property. In a trust, legal title to the property -- the right to manage the property -- is held by one person, called a trustee, while another person, called the beneficiary, has the beneficial right to the use and enjoyment of the property. A living trust is a trust created while the creator is living (compared to a testamentary trust, which is created at or after the creator's death under the terms of his or her Will). A living trust may be (i) revocable or changeable by the creator prior to his or her death or (ii) irrevocable or unchangeable by the creator.
No. Many young parents with limited assets choose to create trusts either during life or in their Wills for the benefit of their children the event both parents die before all their children have reached an age where they are mature enough to handle property. This permits the trust estate to be held and used for the health, maintenance, support and education of minor children according to their respective needs, with eventual division of the trust among the child or children when they reach the required age chosen by the trust creator.
An attorney should evaluate your particular situation to determine if a living trust is right for you. The use of a Living Trust may be beneficial if you have one or more of the following circumstances:
- Real estate in another state.
- Concerns about disability or incapacity in the future.
- You are concerned about privacy.
- You need post-retirement and wealth planning.
- Contesting of your Will, is probable.
A Will or trust created this way is likely to have some effect, but it may not work the way you intend. Wills are complex documents that should be prepared by an attorney.
Yes. A Will that is valid in the state where it was drafted is valid in Texas as well. However, it is still a very good idea to have a Texas attorney review your estate planning documents. Each state has special provisions that should be included in Wills that will be probated in that state. These special provisions allow for a smoother, easier probate process. We will be glad to review your documents and make suggestions based on Texas law.
Regardless of where you live, you should have your Estate Plan reviewed by an attorney or other estate planning professional periodically, to assure that it still meets your needs. You should have your plan reviewed if any of the following events occur:
- The marriage, divorce, illness or incapacity of any member of your immediate family;
- The death of any member of your immediate family;
- A significant change in your financial condition (positive or negative);
- You move to another state or country;
- You or a spouse receive a large gift or inheritance;
- You acquire property which requires special consideration and handling;
- You change your mind about how to dispose of your property and/or who you want as your representatives; and
- If there is a significant change in the tax laws which may affect your estate.
No. Your Will only disposes of your probate property. Probate property is property that does not pass by a beneficiary designation. All property that has a beneficiary designation is called Non-Probate Property. The most common types of Non-Probate property are life insurance, retirement plans, annuities, bank accounts held as “joint tenants with rights of survivorship” or “pay on death” designations. It is also not uncommon to hold brokerage accounts with a “right of survivorship.” The beneficiary designations control who receives this property. If your Will gives all of your property to your sister, but the beneficiary designation on your life insurance lists your brother as the sole beneficiary, your brother will receive the life insurance policy. It is important to coordinate your estate plan and non-probate beneficiary designations to work together.
A plan like this may work in some situations, but in most cases it fails to cover many contingencies which may occur, with disastrous results. There also are potential negative tax consequences of using only beneficiary designations or pay-on-death designations to pass property at your death.
Yes. The following is a list of documents to consider as part of your overall Estate Plan:
- Statutory Durable Power of Attorney, in which you grant a designated individual(s) broad power and authority to deal with your property;
- Medical Power of Attorney, in which you give a designated individual(s) the authority to make health care decisions for you, if you are incapacitated and unable to make the decisions yourself and your physician has certified that in writing;
- Declaration of Guardian for Minor Children, in which you name the person or persons you want to be the guardian of your child(ren) and estate in the event of your death or disability;
- Declaration of Guardian in Advance of Need,in which you name the person you want to be the guardian of your person and estate should the need later arise;
- HIPAA Authorization, which limits the disclosure of protected medical information to those you designate in writing, and will be released only to those designated in the authorization;
- Directive to Physicians, (sometimes thought of as the “pull the plug” or “don’t pull the plug” document) in which you indicate your personal wishes regarding medical treatment in the event of a terminal or irreversible condition;
- Appointment of Agent to Control Disposition of Remains, which designates an agent to dispose of your remains after your demise; and/or
- Anatomical Gift Forms, which states your intent that some or all of your body parts may be used to prolong or improve the life of others or to advance the purposes of medical science, or both.
Please bring your financial and legal documents, including: personal financial information; current account statements for personal and retirement accounts; statements for your banking, investment, and brokerage accounts; life insurance documents; legal property descriptions; prior estate planning documents; divorce decrees and property settlement agreements; and corporate documents for any business you may own. If you have a doubt about what to bring, gather as much of the above information as possible, and we will determine at the initial meeting if anything else is necessary.
- The first thing is to take care of your family. If you have already located the Will, look to see if there are any provisions regarding the wishes of the deceased. Also look to see if the person had a prepaid funeral contract.
- Notify the person’s employer and the social security administration if he or she was receiving social security benefits.
- Locate the original Will and review it to determine who is named as the executor. You have four years after the date of death to admit a Will to probate and have an executor appointed by the probate court. If you cannot locate a Will, it may be necessary to have determination of heirship.
- Contact a probate attorney. You are not required to use the attorney who drafted the Will. Find an attorney in your area that is experienced in handling probate matters – like us! All of the attorneys in our Firm have years of experience handling probate matters.
- Make a list of the person’s assets and debts. This will help your attorney determine whether or not you need to probate the Will. The probate procedure or trust administration will depend on the nature of the assets and debts and how they are titled. It may be possible to utilize a less complicated approach, such as an affidavit of heirship or a small estates affidavit, instead of probating the Will.
Whether or not you need to probate depends on the nature of the assets and how they are titled (in whose name are they held). There may be shortcut methods to avoid a complete administration, if appropriate. We can help you answer questions like these at an initial client meeting.
No. Powers of attorney are only effective during the lifetime of the person who granted the power. Once that person dies, the power of attorney dies with them. The only person authorized to act on behalf of a deceased individual is the court approved or appointed executor or administrator.
Yes. Being named as the executor in a Will is just the first step. You are not qualified to act on behalf of the estate until the judge signs an order admitting the Will to probate and appointing you as the executor, you have taken your oath with the court, and you have posted any required bond. Once you have been qualified, the clerk will issue Letters Testamentary which is a court order stating that you have the right to administer the estate.
It is very important to read and understand the Will or trust so that you will know:
- Who are the beneficiaries?
- Who is to receive what and when?
- Who, if any, are your co-fiduciaries?
- Does the Will give everything outright, or does it create new trusts that may continue for several years?
- Does a trust mandate certain distributions or does it leave this to the trustee's discretion?
- How many years the trust, if any, will be ongoing?
- How are debts (if any) and taxes (if any) to be handled?
The attorney will need to have the original Will, and a certified copy of the death certificate. The attorney eventually will need a list of all assets belonging to the deceased, valued as of the date of death. This will include bank accounts, investments, IRA or other retirement accounts with the balance as of the date of death and insurance, no matter to whom it may be payable. It will include all real estate owned by the decedent, whether alone or jointly with another person. Information about the decedent’s debts (including credit cards, medical bills, mortgage and car loans, if any) is also important. The attorney will need these to determine if the estate is subject to estate tax.
In most cases, the bank or brokerage firm will allow a co-signer on accounts to access funds after the death of one of the co-signers. However, not all accounts with two co-signers automatically belong to the surviving co-signer. It is advisable to consult an attorney before using funds from these accounts for personal purposes, and it is a good idea to keep precise records of how these funds are spent.
A guardianship is a court-supervised administration for a minor or for an incapacitated person. An individual, called the guardian, is appointed by a court to care for the person and/or property of the minor or incapacitated person (the “ward”). In some states, other than Texas, guardianships are called conservatorships.
There are two types of guardians and guardianships. A guardian appointed to take care of the physical well-being of a ward is called a guardian of the person, while a guardian appointed to take care of the ward's property is called a guardian of the estate.
A minor is a person younger than 18 years who has never been married or who has not had his or her disabilities of minority removed by judicial action. A minor is considered an incapacitated person. An adult who, because of physical or mental condition, is substantially unable to provide food, clothing or shelter for himself or herself, to care for his or her own physical health, or to manage his or her own financial affairs is considered an incapacitated person. The definition of incapacitated person also includes a person who must have a guardian appointed to receive funds due the person from any governmental source.