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Houston Estate Planning and Probate Blog

Monday, November 23, 2015

Planning for Your Final Sendoff

Although most people don’t like to think about it, death is inevitable. It’s imperative that you have an estate plan in place that outlines your end of life wishes and how you would like your assets distributed upon your passing. As part of your planning, it’s important that you consider and make arrangements for your funeral or final wishes.  By planning this event before your passing, you can spare your family difficult decisions and ensure that your send off is exactly as you’d like it.

Here are a few things to consider:

Location

Funerals are not limited to funeral homes, churches or temples. If you’re not religious or if you want something different, you might ask that your relatives instead hold a memorial service in your honor at the park or even at the family vacation home.

Burial

Perhaps you hate the idea of being buried at the local cemetery and would prefer to be cremated. There are many options and having your relatives all agree upon one can be challenging. Be sure to make these wishes known as part of your funeral planning.  

Details    

You wouldn’t want someone picking the song for the first dance at your wedding so why would you want someone else deciding all of the details of an event to celebrate your life? As part of your funeral planning, list songs you might want played or poems which should be recited. If your favorite vacation was to Hawaii, you might want to brighten up the event with tropical flowers from Maui.

Obituary

It can be difficult to write about your life but for many writing their own obituary can help them reflect on the important things while giving them a chance to highlight their proudest moments. If you aren’t a writer or find this task daunting, consider writing a few bullet points for your loved ones so the information they share is accurate and provide a list of publications where it should be featured. Sure, your children may know that you belong to the book club but they may have no idea that that same group has a newsletter which should share this information with fellow members.

Virtual Passwords

Traditionally when a person died, his or her children had the task of going through the old phone book and calling contacts to inform them of the news. Today, many of us connect with friends and relatives online. To help your heirs effectively communicate information about your passing, be sure to store your online passwords in a place where your relatives can find them and access the appropriate accounts accordingly.

Paying in Advance

Funerals can be very expensive and a huge burden for many families dealing with the loss of a loved one. Luckily, with the right planning, you can prepay for your funeral and save your family the expense. Generally an attorney or a funeral director can help you to determine how much money will be needed and help you to establish a trust where it will be stored until your passing if you do not pay in advance for your final arrangements.

While planning your funeral may seem to be a depressing thought at first, it is actually empowering—allowing you to determine how you will say farewell to your loved ones and leaving you with the peace of mind that comes from knowing that you’ve taken care of every last detail so your family can celebrate your life without the added stress of planning your funeral or writing your obituary.


Monday, November 16, 2015

Seven Tips for Negotiating Your Divorce Settlement

Regardless of how long you have been married, negotiating a settlement is the most important part of the divorce process. Although it is no easy task, working with your spouse to arrive at mutually agreed terms of your marital dissolution is easier on your wallet and your psyche. Whatever conditions caused the breakdown in the marriage are likely still present throughout the divorce negotiation, exacerbated by emotions such as anger and fear as you each transition into the next stage of your lives.

However, staying focused on what’s best for your future will serve you well as you navigate these tumultuous waters. Taking your divorce case to trial and letting the court decide what will become of your property or children is rarely in your best interest. Although you may not get everything you hoped for during a settlement negotiation, you will save a tremendous amount of money, time and emotional anguish.

Divorce settlement negotiations involve a degree of both skill and art, both of which can be attained by following a few simple tips. Even if your attorney is doing the negotiating on your behalf, it is important that you are clear regarding your priorities, so you can make decisions that are truly in your own best interest for the future life you are establishing post-divorce.

Negotiating a divorce settlement agreement necessarily involves a certain amount of give and take, on both sides, so keep in mind that you most likely won’t get everything you want. But following the tips below can help ensure you get what’s most important to you.

  • Establish clear priorities.
  • Know what you can give up completely, where you can be flexible and those critical items where you are unable to budge.
  • Be realistic about your options and the bigger picture, so you can be reasonable when you must “give” something in order to “take” something.
  • Stay focused on the negotiation itself, and your future; avoid recalling past resentments or re-opening past wounds. Your divorce settlement negotiation is no place for “revenge” which can ultimately delay your case and cost you thousands in unnecessary legal expenses.
  • If your soon-to-be-ex-spouse becomes emotional or subjects you to personal attacks, don’t take it personally. This may be easier said than done, but it is important to stay focused on your priorities and realize that such “noise” does not get you any closer to a settlement agreement.
  • If your spouse presents you with a settlement offer, consider it carefully and discuss it with your attorney. It may not include everything you want, but that may be a fair trade off in order to finalize your divorce and move on with your new life.
  • If you are negotiating your own settlement agreement, consult with an attorney before you make an offer to your spouse or sign any proposed agreement.

By keeping the focus on your priorities, and avoiding the emotionally-charged aspects of your failed marriage, you can ensure you negotiate a divorce settlement agreement that you can live with.


Monday, November 9, 2015

Mediation: Is It Right For You?

Mediation is one form of alternative dispute resolution (ADR) that allows parties to seek a remedy for their conflict without court intervention or a trial. Parties work with a mediator, who is a neutral third party. In addition to formalized training in mediation, usually, mediators also have received some training in negotiation or their professional background provides that practical experience.

Unlike a judge, a mediator does not decide the outcome of a matter or who wins; rather, a mediator facilitates communication between the parties and helps the parties identify issues and possible solutions to their conflict. The goal is for parties to compromise and reach an acceptable agreement.

Mediation can be an appealing option because it is much less adversarial. This might be important when the relationship between the parties has to continue in the future, such as between a divorcing couple with children. The process is also less formal than court proceedings.

Mediation often costs significantly less than litigation, which is another benefit. Another advantage to using mediation is that it generally takes much less time than a traditional lawsuit. Litigation can drag on for years, but mediation can typically be completed in a much shorter time frame. Court systems are embracing mediation and other forms of ADR in an effort to clear their clogged dockets. There are some programs that are voluntary, but in some jurisdictions, pursuing mediation is a mandatory step before a lawsuit can proceed to trial.

Mediation can be used in a variety of cases, and it is sometimes required by a contract between the parties. Mediators can be found through referrals from attorneys, courts or bar associations, and there are companies that specifically provide ADR services. Ideally, a mediator will have some training or background in the area of law related to your dispute.

Mediation is often a successful way to reach a settlement.

Contact our law firm today to help determine if mediation would be a valuable tool to resolve your dispute.


Wednesday, April 15, 2015

Don’t Let Your Social Networking Activities Undermine Your Divorce Negotiations

According to the American Academy of Matrimonial Lawyers, in the past five years 81% of its members have represented clients in cases involving evidence from social networking sites, such as Facebook, MySpace, Twitter, YouTube and LinkedIn.  Posted pictures and comments can make the job all-too-easy for your former spouse’s attorney to attack your credibility and ensure you do not receive the relief that you are requesting from the court.

A picture is worth a thousand words. And that picture you posted of yourself, in various stages of undress, or with a marijuana cigarette in one hand and a drink in the other, speaks volumes to the court and can result in unfavorable rulings regarding child custody or visitation. But the information posted doesn’t even have to be tawdry or illegal to land you in trouble. What about the ex-husband who claims he has no income, but his Facebook profile is chock-full of photos of luxury purchases or exotic vacations? What about the parent who posts profanity-laden status updates, insulting the judge’s competence? Should it find its way into the court, none of this information is going to help your case.

All of these communications can be considered by the court in making its rulings. Nothing you post online is 100% private, regardless of your privacy settings. Opposing attorneys can always subpoena the records, share your dirty secrets with the court, impeach your credibility, and obtain a favorable ruling for their client – your ex or soon to be ex-spouse.

The lasting implications of a negative court ruling can far outweigh the momentary, fleeting satisfaction of venting your frustration at the judge or your ex, or sharing “fun” photos on your Facebook profile. The bottom line is that you have to think before you post. It has often been said that you should not publish anything that you wouldn’t want your Mother to see. A similar standard should be applied for those going through a divorce. What if that comment you are about to make, or the photo you are about to post, were to fall into the hands of your soon to be ex-spouse’s lawyer? This can have far-reaching consequences, affecting your income and support obligations, or visitation and custody of your children.

To avoid the pitfalls of information sharing in the digital age, you must assume that anything and everything you post will be obtained by opposing counsel and find its way into the courtroom. Family law cases involve some of our most private matters and care should be taken to ensure you protect your own privacy. Preserve your attorney-client privilege by refraining from sharing any details of your relationship or conversations with your attorney with other people. Avoid posting compromising photos, or making derogatory remarks on your social networking profiles.

Above all, do not post anything you wouldn’t want your ex, his or her attorney, or the judge to see.  Regardless of how restrictive your privacy settings may be, this information can easily be subpoenaed and become a part of the court record.  If there is any doubt, do not post.  Remember, you cannot “unring that bell!”


Wednesday, April 8, 2015

Pooled Income Trusts and Public Assistance Benefits

A Pooled Income Trust is a special kind of trust that is established by a non-profit organization. A Pooled Income Trust allows individuals of any age (typically over 65) to become financially eligible for public assistance benefits (such as Medicaid home care and Supplemental Security Income), while preserving their monthly income in trust for living expenses and supplemental needs.  All income received by the beneficiary must be deposited into the Pooled Income Trust.

In order to be eligible to deposit your income into a Pooled Income Trust, you must be disabled as defined by law. For purposes of the Trust, "disabled" typically includes age-related infirmities and special needs. The Trust may only be established by a parent, a grandparent, a legal guardian, the individual beneficiary (you), or by a court order. 

Typical individuals who use a Pooled Income Trust are: (1) elderly persons living at home who would like to protect their income while accessing Medicaid home care; (2) recipients of public benefit programs such as Supplemental Security Income (SSI) and Medicaid; (3) persons living in an Assisted Living Community under a Medicaid program who would like to protect their income while receiving Medicaid coverage.

Medicaid recipients who deposit their income into a Pooled Income Trust will not be subject to the rules that normally apply to "excess income," meaning that the Trust income will not be considered as available income to be spent down each month.  The Trust can pay for supplemental needs, medical procedures not provided through government assistance, and some other expenses not provided by government assistance programs.


Wednesday, April 1, 2015

Beware of “Simple” Estate Plans

“I just need a simple Will.”  It’s a phrase estate planning attorneys hear practically every other day.   From the client’s perspective, there’s no reason to do anything complicated, especially if it might lead to higher legal fees.  Unfortunately, what may appear to be a “simple” estate is all too often rife with complications that, if not addressed during the planning process, can create a nightmare for you and your heirs at some point in the future.   Such complications may include:

Probate - Probate is the court process whereby property is transferred after death to individuals named in a will or specified by law if there is no will. Probate can be expensive, public and time consuming.  A revocable living trust is a great alternative that allows your estate to be managed more efficiently, at a lower cost and with more privacy than probating a will.  A living trust can be more expensive to establish, but can, if fully funded, avoid a potentially complex probate proceeding. Even in states where probate is relatively simple, like Texas, you may wish to set up a living trust to hold out of state property or for other reasons.

Minor Children - If you have minor children, you not only need to nominate a guardian, but you also need to consider setting up a trust to hold property for those children. If both parents pass away, and the children do not have a trust, the children’s inheritance could be held by the court until he or she turns 18, at which time the entire inheritance may be given to the child or alternatively, a guardian of the estate must be established by the court. By setting up a trust, which doesn’t have to come into existence until you pass away, you are ensuring that any money left to your children can be used for educational and living expenses and can be administered by someone you trust.  You can also protect the inheritance you leave your children or other beneficiaries from a future divorce as well as from creditors.

Second Marriages - Couples in which one or both of the spouses have children from a prior relationship should carefully consider whether a “simple” Will is adequate. All too often, spouses execute simple Wills in which they leave everything to each other, and then divide the property among their children. After the first spouse passes away, the second spouse inherits everything. That spouse may later get remarried and leave everything he or she received to the new spouse or to his or her own children, thereby depriving the former spouse’s children of any inheritance.  Couples in such situations should consider establishing a special marital trust to ensure children of both spouses will be provided for and/or they should consider making certain provisions for their children immediately upon their death, so their children don’t have to wait until their step-parent dies in order to receive something from their deceased parent’s estate.

Taxes - Although from 2011 forward, federal estate taxes only apply to estates over $5 million for individuals and $10 million for couples, (with such amounts increasing as they are indexed for inflation each year – in 2015, the exemption for individuals is $5,430,000) that doesn’t mean that anyone with an estate under that amount should forget about tax planning. Many states still impose a state estate tax that should be planned around, although Texas does not have a separate state estate tax. 

Incapacity Planning – Estate planning is not only about death planning.  What happens if you become disabled or incapacitated?  You need to have proper documents to enable someone you trust to manage your affairs if you become incapacitated.  There are a myriad of options that you need to be aware of when authorizing someone to make decisions on your behalf, whether for your medical care or your financial, legal and property affairs.  If you don’t establish these important documents while you have capacity, your loved ones may have to go through an expensive and time-consuming guardianship or conservatorship proceeding to petition a judge to allow him or her to make decisions on your behalf.  Simple incapacity protection planning up front can potentially avoid those problems.

By failing to properly address potential obstacles, over the long term, a “simple” Will can turn out to be incredibly costly and ineffective.   An experienced estate planning attorney can provide valuable insight and offer effective mechanisms to ensure your wishes are carried out in the most efficient manner possible while providing protection and comfort for you and your loved ones for years to come.


Sunday, March 8, 2015

Problems with Joint Accounts for Inheritance

When deciding who will inherit your joint financial accounts after you die, it is important to consider that you might outlive the beneficiary you choose.  If you have added someone to your financial accounts to ensure that he or she receives this asset after you die, (like a pay on death designation or a joint account with rights of survivorship), you might be concerned about what will happen should you outlive this person.

What happens to a joint bank account in this situation depends upon the specific circumstances. For example, if a co-owner that was meant to inherit dies first, the account will automatically become the property of the surviving co-owner and will not be included in the decedent’s estate.  Upon the death of the surviving co-owner, the account will be included in their estate to be distributed pursuant to their estate plan.

It is important to make sure you coordinate your estate plan Will provisions with your joint account designations and your beneficiary designations to ensure your overall estate plan benefits the people you intend to benefit.

If you are considering adding someone to your financial accounts so that they inherit it when you die, you should contact an experienced estate planning attorney to discuss your options. 


Sunday, March 1, 2015

Leaving a Timeshare to a Loved One


Many of us have been lucky enough to acquire timeshares for the purposes of vacationing on our time off.  Some of us would like to leave these assets to our loved ones.  If you have a time share, you might be able to leave it to your beneficiaries in a number of different ways. 

One way of leaving your timeshare to a beneficiary after your death is to modify your Will or Revocable Living Trust.  The modification should include a specific section in the document that describes the time share and makes a specific bequest to the designated beneficiary.
Read more . . .


Sunday, February 22, 2015

Know the Risks of “D-I-Y” Divorce

“Do it yourself” divorce is fraught with risks – even if your case is “simple” and both parties agree on all issues regarding division of property, support, and child custody and visitation. As many have learned the hard way, it is all too easy to make critical missteps today that will come back to haunt you down the road.

The proliferation of DIY websites and non-attorney legal document preparers give the impression that the process is simpler than it is. These services can help you deal with the court forms required to dissolve a marriage, including financial disclosures, motions, hearing notices and child support paperwork. It’s tempting to save money by using one of these services to prepare and file your divorce forms without using a lawyer.

Unfortunately, these services won’t be able to help you when things do not go as planned, as they cannot offer you any legal advice or engage in any negotiations on your behalf. Worse still, they cannot point out the pitfalls contained in your paperwork which can pose risks to your financial future long after you think you’ve put the marriage behind you.

The typical do-it-yourselfer believes that everything is correctly resolved because the court accepted and processed the forms and has issued the divorce decree. However, this may or may not be the case; and potential problems can remain undiscovered for years until, for example, one spouse embarks on a significant financial transaction such as purchasing a home.

A common scenario involves incomplete (or incorrect) provisions in a marital settlement agreement, leaving both spouses legally on the hook for a mortgage. What happens when the spouse who kept the home and obligated to make the monthly payments fails to do so? What happens when the other spouse applies for a mortgage on a new home, but the amount of the monthly payment of the previous mortgage is still considered when calculating the debt-to-income ratio? This is just one example of how “saving money” on the front end of your divorce can cost you greatly in the future.

Even if your divorce is “uncontested,” in that you and your spouse agree on all of the settlement terms, getting legal advice upfront will ensure the process goes smoothly and that you do not encounter any unpleasant surprises in the future. A consultation with a family law attorney can identify what issues must be addressed, point out potential negative consequences of certain decisions, and let you know what to expect throughout the divorce process.

If your divorce case is “contested,” meaning you cannot agree on terms regarding your property or children, it is important that you consult with a lawyer to obtain a realistic idea of what you can expect based on your legal rights under the circumstances. And, unlike the DIY services, an attorney can also represent your interests during settlement negotiations. If settlement negotiations are unsuccessful, your lawyer can ensure the court fully considers all information in your favor prior to making any rulings. 

Sometimes, it really is true that “you get what you pay for.”


Saturday, January 31, 2015

Executor’s Fees

An executor's fee is the amount charged by the person who has been appointed as the executor of the probate estate for handling all of the necessary steps in the probate administration. Therefore, if you have been appointed an executor of someone’s estate, you might be entitled to a fee for your services.  This fee could be based upon a variety of factors and some of those factors may be dependent upon state or even local law or possibly, specific provisions in the Will.

General Duties of an Executor

  1. Securing the decedent's home and property (changing locks, etc.)
  2. Identifying and collecting all assets, including bank accounts, investment accounts, stocks, bonds and mutual funds
  3. Consider the possibility of having all real estate appraised; having all tangible personal property appraised
  4. Paying all of the decedent’s lawful debts and final expenses
  5. Making sure all income and estate tax returns are prepared, filed and any taxes paid
  6. Collecting all life insurance proceeds and retirement account assets
  7. Accounting for all actions; and making distributions of the estate to the beneficiaries or heirs according to the provisions in the Will.

This list is not all-inclusive and depending upon the particular estate more, or less, steps may be needed.

As you can see, there is a lot of work (and legal liability) involved in being the executor of an estate.  Typically the executor would keep track of his or her time and a reasonable hourly rate would be used. Other times, an executor could charge based upon some percent of the value of the estate assets. What an executor may charge, and how an executor can charge, may be governed by state law or even a local court's rules or the provisions of the Will itself. The decedent can put in his or her Will that the executor should receive a certain amount of compensation or that the executor should serve without compensation. However, the named executor is not obligated to take the job. He or she could simply decline to serve. If no one will serve without taking a fee, and if the decedent’s Will states the executor must serve without a fee, a petition could be filed with the court asking them to approve a fee even if the Will says otherwise. Notice should be given to all interested parties such as all beneficiaries.

If you have been appointed an executor or have any other probate or estate planning issues, contact us for a consultation today.


Monday, January 19, 2015

Role of the Successor Trustee

When creating a trust, it is common practice that the person doing the estate planning will name themselves as trustee and will appoint a successor trustee to handle matters once they pass on.  If you have been named successor trustee for a person that has died, it is important that you hire a wills, trusts and estates attorney to assist you in carrying out your duties. Although the attorney that originally created the estate plan would most likely be more familiar with the situation, you are not legally required to hire that same attorney. You can hire any attorney that you please in order to determine what your obligations are with respect to the trust.

 If the decedent had a will it is common that the successor trustee is also named as the executor.  Although the role of executor is similar to that of trustee, there are technical differences. If there was a will, you should consult with an attorney to determine if a court probate process will be required to administer the estate. If all assets were titled in the trust prior to the person’s death, or passed by beneficiary designation, such as in the case of life insurance and retirement plan assets (such as 401ks, IRAs, etc.), then a court probate may not be needed. However, if there were accounts or real estate in the person’s name alone that were not covered by the trust, a court probate may be necessary.

During the probate process, all of the deceased person’s assets must be collected and accounted for. This includes all bank accounts, stocks, bonds, mutual funds, investment accounts, retirement assets, life insurance, cars, personal belongings and real estate. All of these assets should be valued and listed on one or more inventories. Depending upon the value of the assets, an estate tax return may be needed. You should be aware of any final expenses, the person’s final income tax returns, and any creditors. Although this process is lengthy, once all of the appropriate steps are taken, the assets will be distributed and the estate will come to a close. 

If you have been named a successor trustee or an executor, an experienced estate planning attorney can help you through this process and make sure you carry out your legal duties as required.  Contact us for a consultation today.

 


Role of the Successor Trustee

When creating a trust, it is common practice that the person doing the estate planning will name themselves as trustee and will appoint a successor trustee to handle matters once they pass on.  If you have been named successor trustee for a person that has died, it is important that you hire a wills, trusts and estates attorney to assist you in carrying out your duties. Although the attorney that originally created the estate plan would most likely be more familiar with the situation, you are not legally required to hire that same attorney. You can hire any attorney that you please in order to determine what your obligations are with respect to the trust.

 If the decedent had a will it is common that the successor trustee is also named as the executor.  Although the role of executor is similar to that of trustee, there are technical differences. If there was a will, you should consult with an attorney to determine if a court probate process will be required to administer the estate. If all assets were titled in the trust prior to the person’s death, or passed by beneficiary designation, such as in the case of life insurance and retirement plan assets (such as 401ks, IRAs, etc.), then a court probate may not be needed. However, if there were accounts or real estate in the person’s name alone that were not covered by the trust, a court probate may be necessary.

During the probate process, all of the deceased person’s assets must be collected and accounted for. This includes all bank accounts, stocks, bonds, mutual funds, investment accounts, retirement assets, life insurance, cars, personal belongings and real estate. All of these assets should be valued and listed on one or more inventories. Depending upon the value of the assets, an estate tax return may be needed. You should be aware of any final expenses, the person’s final income tax returns, and any creditors. Although this process is lengthy, once all of the appropriate steps are taken, the assets will be distributed and the estate will come to a close. 

If you have been named a successor trustee or an executor, an experienced estate planning attorney can help you through this process and make sure you carry out your legal duties as required.  Contact us for a consultation today.

Role of the Successor Trustee

When creating a trust, it is common practice that the person doing the estate planning will name themselves as trustee and will appoint a successor trustee to handle matters once they pass on.  If you have been named successor trustee for a person that has died, it is important that you hire a wills, trusts and estates attorney to assist you in carrying out your duties. Although the attorney that originally created the estate plan would most likely be more familiar with the situation, you are not legally required to hire that same attorney. You can hire any attorney that you please in order to determine what your obligations are with respect to the trust.

 If the decedent had a will it is common that the successor trustee is also named as the executor.  Although the role of executor is similar to that of trustee, there are technical differences. If there was a will, you should consult with an attorney to determine if a court probate process will be required to administer the estate. If all assets were titled in the trust prior to the person’s death, or passed by beneficiary designation, such as in the case of life insurance and retirement plan assets (such as 401ks, IRAs, etc.), then a court probate may not be needed. However, if there were accounts or real estate in the person’s name alone that were not covered by the trust, a court probate may be necessary.

During the probate process, all of the deceased person’s assets must be collected and accounted for. This includes all bank accounts, stocks, bonds, mutual funds, investment accounts, retirement assets, life insurance, cars, personal belongings and real estate. All of these assets should be valued and listed on one or more inventories. Depending upon the value of the assets, an estate tax return may be needed. You should be aware of any final expenses, the person’s final income tax returns, and any creditors. Although this process is lengthy, once all of the appropriate steps are taken, the assets will be distributed and the estate will come to a close. 

If you have been named a successor trustee or an executor, an experienced estate planning attorney can help you through this process and make sure you carry out your legal duties as required.  Contact us for a consultation today.


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